Paper-maker Domtar Corp. reported fourth-quarter and yearend earnings yesterday that showed a marked improvement over its year-earlier performance.
For the fourth quarter, Domtar reported net earnings of $124-million, or $2.86 a share, compared with a net loss of $676-million ($15.72) in the year-ago period.
Revenue for the quarter was $1.404-billion, a slight decrease from the previous fourth-quarter's sales of $1.465-billion at Domtar, the largest integrated manufacturer and marketer of uncoated freesheet paper in North America
Excluding certain items, including closing and restructuring costs of $29-million, and a $27-million charge for the writedown of property, plant and equipment, fourth-quarter revenue was $1.39 a share, beating analysts' estimates by 62%.
For the fiscal year ended Dec. 31, 2009, Domtar reported net earnings of $310-million ($7.21) compared with a net loss of $573-million ($13.33) in the previous year.
Revenue for the full year was $5.5-billion, down from 2008's $6.4-billion.
"While we faced a high level of lack-of-order downtime and a steep decline in pulp prices in the first half of the year, we benefited from stable prices in papers and kept our inventories low," said John Williams, chief executive.
"Meanwhile, our efforts to reduce working capital and lower fixed costs proved to be a catalyst for the second half of 2009. The sustained focus on customers, costs and cash helped us deliver a stronger company to our shareholders and to start 2010 with optimism."
Looking forward to 2010, the company said it expects a decline in paper demand will be offset by increased economic activity and price increases this year. It does expect pulp demand to remain strong in the short term.
"The economic recovery being slow and patchy, Domtar will continue to manage its business conservatively," the company said in a statement. "Due to the seasonality of the business and the impact of the price increases being implemented, we expect to make working capital investments in the first quarter of 2010."