Resolute Forest Products (RFP) Tops Q3 EPS by 32c, Revenues Miss

Resolute Forest Products (NYSE: RFP) reported Q3 EPS of $1.03, $0.32 better than the analyst estimate of $0.71. Revenue for the quarter came in at $974 billion versus the consensus estimate of $1.01 billion.

"Our best pulp quarter combined with continued positive market dynamics for paper helped offset the effects of a weaker lumber market, leading to another quarter of record results and a further reduction in leverage. Our continued focus on improving operational performance also resulted in a notable increase in the profitability of our specialty papers business," said Yves Laflamme, president and chief executive officer.

"We recently entered into an agreement to sell the Catawba paper and pulp mill for $300 million, and today, we will complete the previously announced sale of the Fairmont recycled pulp mill for proceeds of $62 million, subject to final working capital adjustments. These transactions allow us to maximize the value of these assets and redeploy capital to increase shareholder value. We remain focused on growing our core businesses in line with our transformation strategy, reducing debt and returning capital to our shareholders."

Outlook

"Our view on pulp markets remains positive through the fourth quarter, supported by continued market supply disruptions and steady demand growth. For lumber, the recent price declines are expected to negatively impact our results in the fourth quarter. In the medium to long term, we believe that the ongoing recovery in U.S. housing starts and the growth in the repair and renovation segment should improve demand. While paper markets continue to be impacted by the structural decline in demand, we expect the implementation of previously announced price increases for some of our paper products to continue to favorably impact our results in the fourth quarter. For tissue, we continue to focus on operational improvements to support our sales growth," added Mr. Laflamme.

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

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