Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Earnings Are Down

Potlatch Corporation recently reported lower earnings for the fourth quarter as unfavorable market conditions for most of the company's products continued to adversely affect results. Earnings for the entire year were slightly higher than 1997.

For the fourth quarter, net earnings were $3.9 million, compared to $5.7 million for the fourth quarter of 1997. Net earnings per diluted common share were $.13, versus $.20 reported for the fourth quarter of 1997.

Net sales for the quarter were $358.2 million, down from $379.8 million in 1997.

Net earnings for 1998 were $37.2 million, or $1.28 per diluted common share. For 1997, net earnings were $36.1 million or $1.24 per diluted common share. Net sales for 1998 were $1.57 billion, equal to the amount reported for 1997.

Wood products segment earnings were $13.6 million for the fourth quarter of 1998, an improvement over the $12.5 million earned in 1997's fourth quarter.

"Increased shipments and higher net sales realizations for oriented strand board (OSB) offset lower net sales realizations for the company's lumber products," John M. Richard, Potlatch chairman and chief executive officer, said. "Although OSB net sales realizations were higher compared to the fourth quarter of 1997, they declined significantly from the third quarter 1998."

The Printing Papers segment reported earnings of $6.4 million, up from the $2.6 million earned in the fourth quarter of 1997.

"Lower production costs combined with lower selling expenses positively affected the results for the quarter," Richards said. "Printing paper markets remained poor during the fourth quarter."

The Pulp and Paper segment reported fourth quarter earnings of $5.1 million, substantially below the $12.9 million earned in the fourth quarter of 1997.

"The economic conditions in Asia continued to adversely affect paperboard markets, as both shipments and net sales realizations declined for the company's paperboard products," Richards said. "However, the weaker paperboard markets were partially offset by lower production costs at the Lewiston, Idaho, pulp mill and higher net sales realizations and shipments for consumer tissue products."

Other income for the fourth quarter 1998 contained a number of non-operating items, including a cross-border lease, an insurance claim recovery and several other less significant items.

Potlatch is a diversified forest products company with timberlands in Arkansas (including Prescott), Idaho and Minnesota.