* Q1 EPS $1.59 vs analyst view $1.07
* Q1 consolidated sales up 12 pct (Recasts, adds details)
April 30 Forestry firm Domtar Corp (UFS.TO)
(UFS.N) posted a first-quarter profit that beat market
estimates, aided by price increases and higher pulp, paper and
Higher prices for pulp, lumber and oriented strand board
have boosted shares of companies like Domtar, whose shares have
seen a more than three-fold increase since last year.
Domtar said it is now operating at full capacity with a
lengthening backlog as a result of increased paper demand.
The company said it has built inventories of pulp ahead of
the second quarter as it expects a higher level of maintenance
work at its mills in preparation for the recently announced
investment at its Kamloops, British Columbia-based pulp mill
that will result in a 41 day shut down.
Domtar said it will benefit from price increases in pulp
and paper, which are in the process of being implemented, but
warned that input costs may rise moderately.
Q1 BEATS STREET
The company, which operates across paper, pulp, and wood
segments, saw profits of $58 million or $1.34 a share, compared
with a loss of $45 million or $1.05 a share, a year ago.
Dual-listed Domtar earned $1.59 a share, excluding items.
Included in the first-quarter results was a pre-tax $25
million refundable excise tax credit for the production and use
of alternative biofuel mixtures. That is down from the $46
million it received last year.
Analysts on average had expected Domtar, one of the largest
producers of uncoated freesheet paper in North America, to earn
$1.07 cents a share, on revenue of $1.44 billion, according to
Thomson Reuters I/B/E/S.
Consolidated sales for the Montreal-based company rose 12
percent to $1.46 billion.
Domtar said demand for its uncoated freesheet paper remains
stable from month to month, and it expects the increasing level
of economic activity to be supportive of the recent trend.
In March, Domtar sold its forest products business to Eacom
Timber Corp ETR.V for C$80 million, plus certain capital
adjustments, allowing Domtar to focus on its paper and
speciality pulp businesses.[IDn:N29244352]
Domtar's shares closed at C$76.60 Thursday on the Toronto
(Reporting by Isheeta Sanghi in Bangalore; Editing by