Buckeye Technologies issues Q2 guidance above the Street
Buckeye Technologies Inc. (NYSE: BKI), manufacturer and marketer of specialty fibers and non-woven materials, said this morning that it expects its earnings for the October though December quarter to clock in above the consensus on Wall Street. Additionally, the firm said it is downsizing at its facility near Vancouver, British Columbia.
The Memphis, Tenn.-based company said it expects earnings to be in the range of $0.34 to $0.36 per share, above the consensus of three analysts polled by Thomson Financial of $0.30 per share. Buckeye had earnings of $0.10 per share for the same period last year.
Buckeye said its rosier earnings expectations are a combination of higher pricing, higher wood volume and cost control. In comparison with its first quarter, the small cap said its operating earnings performance improved due to high operations reliability and higher wood specialty shipments.
The company, however, capped a caveat on its earnings guidance, stating that while the current quarter’s earnings performance will be difficult to repeat, it does anticipate strong performance in the third quarter of 2008.
Second quarter net sales climbed 14% to $210.59 million from $184.73 million in the second quarter last year. Two analysts surveyed by Thomson Financial were on average forecasting sales of $201.23 million.
Buckeye said it is also reducing staff at its Delta airlaid facility by 20 to 25 employees due to the loss of a significant volume of business for that facility following negotiations with a long time customer.
Additionally, the small cap noted that the strong Canadian dollar and the high transportation cost from Delta’s location were key factors for the company’s inability to meet customer’s pricing requirements at an acceptable margin. Despite this reduction in business, the company was explicit in stating that demand for its airlaid non-woven products remains “solid.”
Buckeye plans to announce actual second quarter results on Jan. 29.
Shares of Buckeye Technologies (BKI) bolted 29.61%, or $3.05, to $13.35 at 3:34 p.m. ET. Shares of Buckeye Technologies have been trading in the range of $10 to $19.20 for the past 52 weeks.
