Earnings Climb at Georgia-Pacific

Georgia-Pacific ( GP) posted a huge increase in second-quarter earnings Thursday, helped by higher prices in its building products business. However, the results fell a penny shy of the Wall Street consensus.

Earnings rose to $220 million, or 84 cents a share, from $61 million, or 24 cents a share, in the year-earlier period.

Before items, the company earned $239 million, or 91 cents a share, compared with $63 million, or 23 cents a share. On that basis, analysts were calling for 92 cents a share, according to Thomson First Call.

Georgia-Pacific said income from continuing operations rose to $230 million from $54 million a year ago.

Sales were $5.19 billion, up from $4.88 billion a year ago.

In its building products segment, operating profit surged to $367 million from $39 million a year ago. The company said structured panel prices remain robust, though off record highs.

"Our building products business, which set a new quarterly profit record, remains robust and we see consistent signs that our consumer products business strategy is working," the company said in a statement. "Through the balance of the year, we are optimistic that favorable trends in our paper businesses will further strengthen, while our building products business will remain on solid footing."

Georgia-Pacific said its North American consumer products segment reported record operating profit in the quarter of $148 million, including an asset impairment and restructuring charge. That compared with $147 million a year ago.

Tissue prices were up 5%, and retail case shipment volume was up 4%.

The company's international segment was somewhat weak in the quarter, however, with operating profit slipping to $38 million from $39 million a year ago. The company said shipments were down in the segment, though results were helped by $3 million due to favorable currency exchange.

"Our branded products continue to be under pressure from private label products. We are addressing this aggressively by reducing our operating costs and by intensifying our focus on new product offerings and on innovation," the company said.

Atlanta-based Georgia-Pacific said the outlook for all of 2004 is "encouraging" as it plans to continue cost controls and capital investments.

Analysts are calling for a profit of $2.86 a share, which would be up from $1.32 a share in the prior year.

Shares of the company fell recently 87 cents, or 2.5%, to $33.58. The stock is up about 63% year-over-year.

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