Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Reports Lower Earnings Due To Poor Market Conditions

Potlatch Corporation reported lower earnings for the third quarter of 1997, due to poor market conditions for oriented strand board.

Net earnings for the third quarter were $14.1 million or $.49 per common share. Net earnings in 1996's third quarter were $19.5 million or $.68 per common share. Net sales were $395.4 million for the quarter, compared with $398.2 million in the third quarter of 1996.

Net earnings for the first nine months of 1997 were $30.4 million, or $1.05 per common share. Net earnings for the first nine months of 1996, before a $.10 per common share extraordinary charge for early extinguishment of debt, were $42.6 million, or $1.48 per common share. Net sales for the first nine months of 1997 were $1.19 billion, versus $1.17 billion in 1996.

The Wood Products Group operating income of $15.3 million for the third quarter of 1997, down from $18.5 million earned in 1996's third quarter.

"The decline was due to lower net sales realizations for oriented strand board," John M. Richards, Potlatch chairman and chief executive officer, said.

"Net sales realizations for oriented strand board," Richards said. "Net sales realizations for oriented strand board were 29 percent lower than the same period last year. However, improved shipments and realizations for all wood products offset the majority of the earnings decline from oriented strand board."

Operating income for the Minnesota Pulp and Paper Division was $11.0 million for the quarter, down from $14.5 million earned in the third quarter of 1996. "Lower net sales realizations reflected a less favorable product mix compared to last year's stronger markets," Richards said.

The other pulp-based businesses, which include the Pulp and Paperboard Group and the Consumer Products Division, reported third quarter 1997 operating income of $15.1 million, up from $10.9 million earned a year ago.

"The primary reasons for the increase were improved operations and lower operations and lower production costs for the Pulp and Paperboard Group," Richards noted.

The Consumer Products Division benefited fom higher net sales realizations, although the benefits were offset by higher pulp costs.

In late September, the company relocated its executive office from San Francisco, Calif., to Spokane, Wash.

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