Domtar eat expectations as it recorded higher profit in the third quarter despite weaker overall revenue.Brigitte Bouvier/The Globe and Mail
Domtar Corp. beat expectations as it recorded higher profit in the third quarter despite weaker overall revenue.
The Montreal-based maker of pulp, paper and personal care products said it earned $59-million (U.S.) or 94 cents per diluted share for the three months ended Sept. 30.
That compared to $11-million or 17 cents a year earlier.
Excluding one-time items such as closure and restructuring charges, adjusted earnings increased 31 per cent to $71-million or $1.13 per share.
Overall revenue dipped to $1.27-billion from $1.29-billion in the third quarter of 2015.
Domtar was expected to record 97 cents per share in adjusted profits on $1.29-billion in profits, according to analysts polled by Thomson Reuters.
The company benefited in the quarter from lower maintenance and raw material costs that was partially offset by lower selling prices and paper shipments.
The pulp and paper segment, which accounts for most of Domtar's activities, saw operating income surge to $89-million from $54-million despite a 3.5-per-cent drop in revenue.
Sales in the personal care business, including diapers and feminine hygiene products, grew 8 per cent but earnings fell 17 per cent to $15-million.
Domtar expects the fourth quarter will be hampered by seasonal softness amid volatile pulp prices and higher wood, energy and chemical costs.