Paper Makers Post Lower Earnings

Georgia-Pacific Corp., Louisiana-Pacific Corp., Champion International Corp. and Potlatch Corp. reported lower second-quarter profits Thursday, as paper prices dropped from the exceptionally strong year-ago quarter.

All but Louisiana-Pacific were able to beat Wall Street earnings estimates, though.

Thursday’s earnings, along with International Paper Co.’s stronger-than-expected results reported Tuesday, suggest that paper industry profits will start to rise after three straight quarters of decline.

“The worst is behind them in terms of shipments and pricing,” said Bill King, an analyst at San Francisco-based Montgomery Asset Management, which has been buying paper stocks.

Georgia-Pacific, the Atlanta-based wood, paper and pulp producer, said second-quarter profit from operations fell 79% to $55 million, or 61 cents a share, compared with net income of $265 million, or $2.95, a year earlier. Per-share results far surpassed the 13-cent average estimate of Wall Street analysts.

Portland, Ore.-based Louisiana-Pacific said second-quarter profit from operations fell 64% to $15 million, or 13 cents a share, from $42.2 million, or 40 cents, a year earlier. Per-share earnings were 8 cents short of analysts’ 21-cent average estimate.

Champion International of Stamford, Conn., said second-quarter net income fell 92% to $15.6 million, or 16 cents a share, from $187.5 million, or $1.93, a year ago. Per-share earnings easily surpassed the 9-cent average estimate of analysts.

San Francisco-based Potlatch’s profit from operations fell 24% to $18.1 million, or 63 cents a share, from net income of $23.9 million, or 81 cents, a year earlier. Per-share earnings surpassed the 57-cent average estimate of Wall Street analysts.