Temple-Inland second-quarter net income hurt by mill outages and low inventory

Outages, lower inventory hurt Temple-Inland’s 2Q

AUSTIN, Texas — Timber company Temple-Inland Inc. on Tuesday reported that its second-quarter net income fell as mill outages and low inventory in its corrugated packaging segment offset the benefit from raising its prices.

Temple Inland’s shares fell almost 5 percent in afternoon trading.

Its adjusted earnings per share missed analyst expectations, but its revenue was higher than Wall Street forecast.

Temple Island earned $20 million, or 18 cents per share, compared with $66 million, or 61 cents per share, a year earlier. This year, the quarter’s results included costs of 1 cent per share related to closing plants and cutting jobs. In last year’s second quarter, Temple Inland benefited from a gain of $47 million, or 43 cents per share, for alternative fuel mixture tax credits.

Excluding one-time items, the company earned 19 cents per share in this year’s second quarter, down from 24 cents per share a year earlier. Analysts polled by Thomson Reuters, who typically exclude one-time items, on average forecast net income of 32 cents per share.

Revenue rose 8 percent to $976 million from $906 million. Analysts expected revenue of $969.6 million. Revenue in the company’s corrugated packaging unit rose 3 percent to $786 million.

An extended maintenance outage at Temple Inland’s Rome, Ga., mill and unscheduled outages due to utility interruptions at its Maysville, Ky., and Newport, Ind., plants cut $11 million from the company’s quarterly profit. The outages also lowered its inventory, prompting it to make unscheduled purchases of container board and to incur extra freight costs, which cut another $9 million from its earnings.

The building products unit returned to profitability due to cost cuts. Revenue there rose 32 percent to $190 million.

Shares fell $1.05, or 4.6 percent, to $21.75 Tuesday afternoon. The stock has traded between $14.66 and $25.03 during the past year.