Resolute Forest Products (RFP) Misses Q3 EPS by 5c, Revenues Miss

Resolute Forest Products (NYSE: RFP) reported Q3 EPS of $0.72, $0.05 worse than the analyst estimate of $0.77. Revenue for the quarter came in at $730 million versus the consensus estimate of $778 million.

• Q3 GAAP net income of $57 million / $0.66 per diluted share
• Adjusted EBITDA of $140 million
• Net debt down to $541 million / liquidity strengthened to $477 million at quarter-end
• $38 million YTD EBITDA contribution from our recently acquired U.S. sawmills
• Remi G. Lalonde to succeed Yves Laflamme as president and CEO as of March 1

"We took advantage of the rally in lumber prices to further deleverage the balance sheet and drive shareholder value by opportunistically repurchasing 5% of outstanding shares," said Yves Laflamme, president and chief executive officer. "While the pulp and paper segments continue to suffer from pandemic economics, we used part of the cash we generated with our lumber business to fully repay all revolving borrowings under our credit facilities, except for the low-interest term loan used to finance the acquisition of the U.S. sawmills, which have generated $38 million of EBITDA under our ownership this year. The tissue business is also picking up steam: with $6 million of EBITDA in the quarter, it has generated $19 million of EBITDA in the last twelve months."

Outlook

Looking ahead, Mr. Laflamme added: "Together with our strong Canadian lumber business, the well-timed acquisition of U.S. sawmills positioned us well for the recent spike in lumber prices. Although market prices have come off their highs in recent weeks, the demand from the repair & remodeling sector as well as robust U.S. housing starts speak to strong market fundamentals. Accordingly, we are preparing our El Dorado, Arkansas sawmill to be restarted in the next few months. Following a very difficult stretch of over six months, there are signs that paper markets activity is slowly and gradually starting to recover, but we expect that the pandemic will have caused some measure of step-change in the secular demand decline trend. In the last quarter, pulp markets were also affected by the pandemic, but we are already seeing global inventories stabilize around balanced levels, and we are cautiously optimistic that markets will recover with overall economic conditions. In regards to tissue, we will continue to focus on customer portfolio optimization and productivity improvements. While retail end-market conditions remain strong, the away-from-home space, which represents about a third of our business, is under pressure due to the drop in commercial activity."

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

You May Also Be Interested In

• JPMorgan Upgrades Aviva Plc (AV/:LN) (AIVAF) to Overweight
• BitGo CFO to resign effective September 15, 2026
• OptimizeRx names new CFO and CAO, effective January 2027