Resolute Forest Products (RFP) Misses Q3 EPS by 43c, Revenues Miss

Resolute Forest Products (NYSE: RFP) reported Q3 EPS of ($0.47), $0.43 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $705 million versus the consensus estimate of $796 million.

• Q3 GAAP net loss of $43 million / $0.47 per share
• Adjusted EBITDA of $23 million
• Liquidity remains strong at $566 million
• Post-quarter senior secured credit facility refinancing to further boost liquidity by $175 million

"Ongoing weakness in market pulp pricing had a significant impact on our quarterly results," said Yves Laflamme, president and chief executive officer. "While paper has come under pressure this year and lumber markets continue their slow recovery, we are pleased with the progress in sales growth and productivity gains in the tissue business, as we continue to build our position in the segment with positive EBITDA. In October, we successfully used our strong financial situation to increase and extend our senior secured credit facility by $175 million, providing us additional liquidity at very competitive terms to support our transformation initiatives. The proactive steps we have taken over the last few years to strengthen our balance sheet position us well to execute on our strategy despite the cyclical downturn currently affecting the industry."

Outlook

"We expect challenging conditions in market pulp to persist at least through the end of the year, but we see encouraging signs and stronger industry operating rates for softwood pulp, which represents about two-thirds of our production capacity. For tissue, we will build on recent improvements around sales growth and productivity gains to deliver steady improvements over the next few quarters. Even as conditions in the lumber market remain somewhat uncertain, we believe wood products results will improve as reported industry capacity rationalizations support more stable market dynamics. Although we expect to see marginal seasonal improvement in paper shipments in the fourth quarter, we will face sustained pricing pressures for all paper grades, as operating rates remain low. Despite difficult markets, we are focused on maximizing margins and earnings power in our paper business. Our network of competitive assets and solid financial position provide us a strategic edge to weather current market headwinds and take advantage of future transformation opportunities," added Mr. Laflamme.

For earnings history and earnings-related data on Resolute Forest Products (RFP) click here.

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