Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Reports Higher Earnings

Potlatch Corporation reported slightly higher earnings for the second quarter of 1998, largely due to improved market conditions for the company's oriented strand board.

Markets for the company's pulp-based products continued to be very competitive, while the company's lumber markets deteriorated substantially during the quarter.

Net earnings for the second quarter of 1998 were $10.0 million or $.35 per diluted common share. For 1997's second quarter, net earnings were $9.9 million or $.34 per diluted common share. Net sales were $400.5 million, compared with $394.2 million in the second quarter of 1997.

Net earnings for the first half of 1998 were $20.8 million or $.72 per diluted common share. Net earnings for the first half of 1997 were $16.2 million or $.56 per diluted common share. Net sales for the first half of 1998 were $803.0 million, compared with $793.7 million for the 1997's first half.

Operating income for the Wood Products Group was $14.0 million for the second quarter of 1998, an improvement over 1997's $8.7 million.

"Higher net sales realizations and increased shipments for oriented strand board were responsible for the improvement, which more than offset significantly lower lumber realizations," stated John M. Richards, Potlatch chairman and chief executive officer.

The Minnesota Pulp and Paper Division's second quarter operating income of $0.8 million was down from the $9.6 million reported a year ago.

"Significantly lower net sales realizations, due to a less favorable product mix and pricing pressure on midline paper grades, were largely responsible for the decline," Richards said.

The other pulp-based businesses, which include the Pulp and Paperboard Group and the Consumer Products Division, reported second quarter operating income of $21.2 million, up from the $16.5 million earned last year.

"Markets for pulp and paperboard continued to be very competitive," Richards noted.

Production improvements at the Lewiston, Idaho, pulp and paperboard mill helped to reduce costs and contribute to the favorable comparison.

"The Consumer Products Division benefitted from higher production combined with lower pulp costs to record improved results versus the second quarter of 1997," Richards added.

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