Shares of Georgia-Pacific ( GP) were moving higher Wednesday after the company said it expects first-quarter earnings to come in ahead of analysts' estimates, citing solid results from its building products business. The company forecast earnings of 60 cents a share, compared with the 48 cents a share expected from analysts surveyed by Thomson First Call. Georgia-Pacific's guidance excludes $26 million, or 6 cents a share, from early extinguishment of debt expenses. "Results in our building products businesses remained exceptionally strong during the first quarter," said the company in a statement. In the first quarter, lumber and panel prices have risen quickly. Shares of the company were lately up 62 cents, or 1.8%, at $34.74, just under the 52-week high of $34.94 reached Tuesday. Two brokerages upped their earnings estimates on the company on the news. J.P. Morgan called the guidance "modestly positive," saying Wall Street was already expecting higher first-quarter results from the company. "News flow surrounding the stock has been increasingly positive in recent weeks, owing to record-level structural panel prices and reports of price increases on retail and away-from-home tissue, as well as recent asset sales," the brokerage wrote in a research note. J.P. Morgan increased its first-quarter estimate to 60 cents from 50 cents a share, and boosted fiscal 2005 estimates to $2.20 a share from $2.05 a share.
However, the brokerage supported its neutral rating on the stock because of concern about asbestos reform legislation and the competitive consumer tissues market. (J.P. Morgan has an investment banking relationship with Georgia-Pacific.) Credit Suisse First Boston also upped its full-year 2004 estimates on the company to $2.56 a share from $2.35 a share and for 2005 to $3 a share from $2.90 a share. "We would be surprised if any buildings products companies didn't report similarly strong results," the brokerage said in a note. (Credit Suisse First Boston also has an investment banking relationship with Georgia-Pacific.) Atlanta-based Georgia-Pacific will release quarterly results on April 29.