Domtar Q2 EPS Beats as Sales Miss Expectations

Domtar reported Friday above-forecast earnings for Q2 with weaker-than-expected revenues while providing a positive outlook demand for the remainder of the year. Adjusted EPS was $0.61, unchanged from the previous year and ahead of the Capital IQ consensus of $0.54. Sales were $1.22 billion, down slightly from last year’s $1.27 billion, missing the mean estimate of $1.31 billion provided by Capital IQ.

For the remainder of the year, the company said: “we expect our paper shipments to be in-line with market demand. Our pulp shipments should be higher due to the ramp-up of the Ashdown fluff pulp line, while mix should continue to improve as we convert more volume to fluff pulp. In Personal Care, investments in advertising and promotion in addition to new customer wins should drive higher sales, while raw material costs are expected to increase marginally.”

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