Universal Forest Products returns to profitability

Universal Forest Products posts 3rd-quarter profit after year-earlier loss; suspends forecasts

• On 6:19 pm EDT, Thursday October 15, 2009

GRAND RAPIDS, Mich. (AP) -- Universal Forest Products Inc. posted a third-quarter profit Thursday compared with a year-earlier loss despite weaker sales, as cost cuts bolstered results. It suspended profit forecasts, citing tough market conditions.

The lumber and wood packaging producer said net income climbed to $10.1 million, or 51 cents per share, for the three months ended in September. That compares with a loss of $2 million, or 10 cents per share, during the same period in 2008.

Sales fell 25 percent to $457.8 million from $610.7 million.

Analysts surveyed by Thomson Reuters, on average, expected a profit of 40 cents per share on revenue of $476.2 million. Those estimates typically exclude one-time items.

Universal Forest Products said the improved earnings reflect the company's focus on cost containment and sizing the company for lower demand. It said a soft lumber market and the weak economy continue to hurt sales.

The composite lumber price, which affects the company's selling prices, was 13 percent lower in the third quarter than it was a year earlier. The company said it believes weak demand will keep lumber prices depressed through the fourth quarter.

Universal Forest Products said it expects the current challenging conditions to continue through 2009. It said the conditions have limited its ability to provide meaningful guidance for its likely financial performance, and that it has chosen to stop providing such guidance for the foreseeable future.

Shares of Universal Forest Products closed Thursday unchanged at $41.12 before the earnings release was issued.

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