, the Washington-based timber and paper producer, said its third-quarter earnings jumped, helped by an income tax benefit related to its conversion to a real estate investment trust.
The company earned $21.4 million, or 33 cents a share, in the quarter, compared with $1.6 million, or 2 cents a share, a year ago. The company completed its conversion to a REIT, effective Jan. 1, and, as a result, recorded a income tax benefit totaling $25.9 million in the latest quarter. Analysts surveyed by Thomson First Call were expecting earnings of 34 cents a share in the most recent quarter.
Third-quarter revenue increased 9.7% to $245.6 million as against analysts' estimate of $250.5 million.
The company expects 2006 consolidated cash provided by operations of $80 million to $90 million, including the impact of $25 million to $30 million of non-recurring costs associated with early debt retirement, advisory fees and REIT conversion expenses.
"Our third quarter results were highlighted by improved performance and cash generation in our manufacturing segments as operational improvements and favorable pricing momentum continued throughout the quarter. We took appropriate steps to mitigate the continued chip shortage and high chip prices in the Pacific Northwest, shifting production to higher margin products and reducing export pulp sales," the company said.
Longview's converted products segment revenue increased 11.3% to $128.7 million while its operating loss narrowed to $1.5 million from $5.6 million a year ago. Paper and paperboard segment revenue rose 11.7% to $73.5 million due to higher volumes. The segment's operating loss narrowed to $56,000 in the quarter from $602,000 a year ago.
The timber division revenue increased 2.2% to $43.4 million, but the operating profit fell 65.2% to $6.2 million, mainly due to the non-cash impairment charge of about $10.8 million.
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