Domtar Corporation (UFS) recently provided a sneak peek into its second quarter 2013 financial performance when it announced its preliminary results for the quarter. The company is scheduled to report its detailed quarterly results on Jul 25.
For the second quarter, Domtar expects an operating loss in the range of $30 million to $35 million on revenues of $1,312 million. The operating loss is primarily due to low pulp productivity owing to planned maintenance shutdowns of manufacturing plants and delayed starts of pulp mills. This resulted in lower paper and pulp shipments of 801,000 tons and 344,000 metric tons, respectively.
Operating loss for the soon-to-be reported quarter includes a litigation settlement charge of $49 million, closure and restructuring costs of $18 million, $5 million impairment charge, and depreciation and amortization of $93 million. EBITDA is expected to be between $130 million and $135 million.
By quarter-end, Domtar made a significant headway to address its production issues and expects to return to normalcy by the end of the third quarter. In the meantime, the company expects to remain moderately affected by these operational issues.
Domtar manufactures and distributes a wide array of fiber-based products including communication papers, specialty and packaging papers and adult incontinence products. The company is the largest integrated marketer of uncoated freesheet paper in North America with established brands such as Cougar, Lynx Opaque Ultra, Husky Opaque Offset, First Choice and Domtar EarthChoice. Domtar also owns and operates an extensive network of strategically located paper and printing supplies distribution facilities.
Domtar currently carries a Zacks Rank #1 (Strong Buy). Other companies in the industry that are worth mentioning include Resolute Forest Products Inc. (RFP), Orchids Paper Products Company (TIS) and Rock-Tenn Company (RKT), each carrying a Zacks Rank #2 (Buy).
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