Boise Cascade, whose Western Oregon operations include mills in Medford and White City, reported a reduced year-over-year profit in the third quarter despite increased sales.
The Boise, Idaho-based wood products firm reported net earnings of $15.9 million in the third quarter, or 39 cents per share, compared to net earnings of $23.5 million, or 79 cents per share, in the third quarter of 2012.
Boise Cascade said its third quarter sales of $878.0 million topped last year's revenue by 15 percent above the same quarter in 2012.
The company said pricing was more stable in third quarter than in the first half of the year. However, future pricing could be volatile in response to industry operating rates, inventory levels in various distribution channels, and seasonal demand patterns. As a result, Boise will likely operate some of its facilities below capacity until demand improves further.
The company's building materials distribution grew 9 percent to $283.2 million, despite higher wood fiber costs and lower plywood sales prices.
Boise closely monitors U.S. housing starts, which grew 18 percent, according to July and August data. Single-family starts rose approximately 15 percent from the same period in 2012.
The October 2013 Blue Chip consensus forecast for 2013 reflects 930,000 total U.S. housing starts, a 19 percent increase from 2012 levels. Still that is well below the 20-year historical mark of approximately 1.4 million starts per year.
"Our distribution business rebounded sharply from a challenging second quarter and posted strong sales and earnings growth sequentially and compared to the prior year quarter," Chief Executive Officer Tom Carlile said in a statement. "Wood Products executed well on internal veneer production, which allowed us to grow engineered wood product sales while maintaining plywood sales volumes."
The company said it expects demand to remain below 20-year average historical levels for the products it manufactures and distributes.
"However, the housing industry has shown signs of improvement in the U.S., and we remain optimistic that the improvement in demand for our products will continue," Boise Cascade said this morning.
Boise paid $102 million for two plants in the Southeast during the quarter, acquiring Chester Wood Products in Chester, S.C. and Moncure Plywood in Moncure, N.C., from Wood Resources, which is part of Atlas Holdings.
"These added facilities position us well to support our existing, as well as new, customers in the Southeast," Carlile said.
— Greg Stiles