Domtar (UFS) Tops Q3 EPS by 29c, Revenues Miss

Domtar (NYSE: UFS) reported Q3 EPS of $1.46, $0.29 better than the analyst estimate of $1.17. Revenue for the quarter came in at $1.37 billion versus the consensus estimate of $1.41 billion.

• Third quarter 2018 net earnings of $1.57 per share; earnings before items1 of $1.46 per share
• Personal Care margin improvement plan expected to result in $25-30 million of annualized benefit
• Hurricane related impacts of $6 million

“Our strong performance was driven by accelerating price realizations and margin expansion, particularly, within our Pulp and Paper businesses. Our operations also ran exceptionally well, despite some weather-related outages, with productivity gains across the mill system,” said John D. Williams, President and Chief Executive Officer. “We have strong momentum to close the year on a high note, and the confidence that our Pulp and Paper businesses will enter 2019 in the best position in recent years.”

Commenting on Personal Care, Mr. Williams added, “Escalating raw material costs continue to compress our margins in adult incontinence and baby diapers. As a result, we are accelerating the pace of actions that will improve margins and EBITDA, with a plan that is expected to generate annual benefits of approximately $25 to 30 million, with full effect by the end of 2020. This will include headcount reductions, the permanent closure of our Waco, Texas facility, and commercial and operational initiatives. The sum of these actions will reduce our cost base and strengthen our long-term competitive position.”

For earnings history and earnings-related data on Domtar (UFS) click here.

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