MONTREAL - Paper producer Domtar Corp. (TSX:UFS) is reporting net earnings of $59 million, or $1.61 per diluted share for the second quarter compared to $54 million, or $1.30 per share, in the same period last year.
Consolidated sales revenue came in at $1.37 billion for the quarter, down slightly from $1.4 billion year over year.
The Montreal-based company says paper shipments are expected to continue to decline with market demand and pulp markets are expected to remain challenging.
The paper producer was expected to earn US$2.03 per share in adjusted earnings in the first quarter, down from US$3.25 a year earlier, according to analysts polled by Thomson Reuters.
No revenue forecast was available for the producer of uncoated freesheet paper — typically used for desktop printers, fax machines and copiers.
Domtar recently acquired the European operations of adult incontinence company Attends for $264 million.
Analysts say continued strong free cash flow generation allows the company to return capital to shareholders while making such strategic acquisitions to help offset declining paper demand.
Domtar is the largest integrated manufacturer of uncoated freesheet paper in North America and the second largest in the world based on production capacity.
It operates 10 pulp and paper mills in North America, including two in Canada, with annual production capacity of 3.9 million tonnes.
It also manufactures papergrade, fluff and specialty pulp and employs 8,700 people.
Domtar earned US$365 million on US$5.6 billion of revenues last year.
The pulp and paper producer increased its share-buyback program by $400 million to about $1 billion in December.