Universal Forest Products posts 1st-quarter profit after year-ago loss

Universal Forest Products posts 1st-quarter profit

GRAND RAPIDS, Mich. — Universal Forest Products Inc. posted a profit in the first quarter — reversing its year-ago loss — as sales increased and composite lumber costs gained.

The lumber and wood packaging producer said net income climbed to $987,000, or 5 cents per share, for the three months ended in March. That compares with a loss of $1.2 million, or 6 cents per share, during the same period last year. Analysts predicted the company would earn 4 cent a share in the quarter, according to Thomson Reuters.

Sales rose 8.7 percent to $393 million from $361.7 million.

Universal Forest Products said sales would have grown more if it had not been for adverse weather throughout the country in the quarter, which depressed sales to do-it-your-self retail customers and others.

The composite lumber price, which affects the company’s selling prices, was up nearly 50 percent in the quarter over the price at the same time last year. The company said the increase was due to production cuts and plant closures by mills.

Universal Forest Products said it expected the market to change throughout the year so it is managing its purchasing and sales practices to lessen the effect of fluctuating lumber prices on its margins.

Universal Forest Products hasn’t offered guidance for 2010 because the current market is so challenging. Analysts predict the company earns $1.61 a share for the year, according to Thomson.

Shares of Universal Forest Products closed Thursday up $1.52, or 3.6 percent, at $43.89. In after-hours trading shares fell 99 cents, or 2.3 percent, to $42.90.