Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Reports High Earnings For Second Quarter Of 1999

Potlatch Corporation recently reported slightly lower earnings for the second quarter of 1999, compared with last year's second quarter.

Improved results for the company's wood products were offset by unfavorable market conditions during the quarter for the company's pulp-based products. The results also reflect additional costs, including training, associated with the planned startup of the Cloquet, Minn., pulp mill modernization project later this year in the fourth quarter.

Net earnings for the second quarter of 1999 were $9.4 million or $.33 per diluted common share. For 1998's second quarter, net earnings were $10 million or $.35 per diluted common share. Net sales were $413 million, compared with $400.5 million in the second quarter of 1998.

Net earnings for the first half of 1999 were $14.6 million or $.51 per diluted common share, before a nonrecurring after-tax charge of $4.6 million taken in the first quarter. Including the charge, net earnings for the first half of 1999 were $10 million or $.35 per diluted common share. Net earnings for the first half of 1998 were $20.8 million or $.72 per diluted common share. Net sales for the first half of 1999 were $829.5 million, compared with $803.0 million for 1998's first half.

Operating income for the Wood Products segment was $42.5 million for the second quarter of 1999, substantially higher than the $14 million earned in 1998's second quarter. "Higher net sales realizations for the company's wood products, especially oriented strand board, were primarily responsible for the favorable results," stated L. Pendleton Siegel, Potlatch chairman and chief executive officer. "Continued strength in new home construction has had a positive effect on this portion of our business."

The Printing Papers segment recorded a second quarter operating loss of $2.4 million, compared to income of $0.8 million reported a year ago. "Markets for printing papers remain soft, resulting in lower net sales realizations compared to the second quarter of 1998," Siegel said.

The Pulp and Paper segment reported a second quarter operating loss of $2.2 million, versus income of $21.2 million for 1998's second quarter. "Markets for paperboard continue to be very competitive, with net sales realizations substantially below 1998 levels. However, markets appear to have reached bottom during the quarter as we began to see some improvement towards the end of the period," Siegel noted.

Paperboard shipments were also lower than last years second quarter. "Consumer tissue markets continue to be stable, and an increase in product shipments was offset by a decline in net sales realizations." Siegel added.

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