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DJ Resolute Forest Products Down; Reports Smaller 4Q Loss

· 02/04/2021 14:14

By Michael Dabaie

Resolute Forest Products Inc. shares were down in afternoon trading.

U.S. listed shares fell 8% to $8.13, while shares in Toronto were down 9% to C$10.35.

The Montreal-based company, whose products include market pulp, tissue, wood products and papers, reported a fourth- quarter loss of $52 million, compared to a loss of $71 million a year earlier. Loss per share was 63 cents, narrower than the year-earlier loss of 79 cents.

Adjusted EPS came to 55 cents, above the FactSet consensus for 53 cents.

Sales were $769 million in the quarter, up from $668 million in year-ago quarter. FactSet consensus of two estimates was for $743.5 million.

The company reported operating income of $4 million in the quarter, compared to $97 million in the third quarter. The quarterly results reflect a sequential increase in shipments of $14 million, mostly paper, offset by an increase in costs of $23 million due to higher maintenance and log costs and lower internal power generation, as well as the impact of the stronger Canadian dollar of $8 million.

The lower operating income includes non-cash charges related to the temporary idling of the Baie-Comeau and Amos, Quebec, newsprint mills of $80 million in response to the effects of the pandemic.

The market pulp segment recorded an operating loss of $4 million in the fourth quarter, unchanged from the previous quarter. The average transaction price improved by only $3 per metric ton, but shipments rose by 11,000 metric tons. The operating cost per unit rose by $2 per metric ton and finished goods inventory fell to 53,000 metric tons by year-end, a historical low.

The paper segment incurred an operating loss of $19 million in the quarter, compared with a loss of $12 million in the third quarter. The average transaction price slipped by $11 per metric ton, or 2%, and the delivered cost was unchanged despite higher maintenance costs and lower internal power generation. Shipments, however, improved by 43,000 metric tons, and inventory fell to 96,000 metric tons, as demand, particularly for newsprint, started to recover from the deep contraction experienced in the pandemic.

The company reported an operating loss of $3 million in the tissue segment in the quarter, compared to operating income of $2 million in the third quarter.

The wood products segment generated operating income of $128 million in the quarter, unchanged from the previous quarter. The average transaction price improved by $8 per thousand board feet to $608.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

February 04, 2021 14:14 ET (19:14 GMT)

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