Boise Cascade sees Q2 profits fall
Boise Cascade reported second quarter sales fell 20% to $1.8 billion from second quarter 2022 sales of $2.3 billion.
Sales of wood products slipped 1% for the quarter to $530,273 compared to sales of $536,030 for the same period last year.
The Boise, Idaho-based building and wood products manufacturer and distributor said lower plywood sales prices and lower I-joists sales volumes drove a decrease in wood product sales.
The decreases were offset partially by higher plywood sales volumes and higher sales prices for LVL and I-joists.
Building Material Distribution sales saw a more significant drop and declined 23% to $1.6 billion in the second quarter from sales of $2.1 billion for the corresponding quarter a year ago.
The division’s sales were impacted by sales price and sales volume decreases of 22% and 1%, respectively. By product line, commodity sales decreased 36%, general line product sales decreased 8%, and EWP sales decreased 21%.
The company also posted a net income of $146,320 in the second quarter, falling 33% from a net income of $218,111 in the second quarter 2022.
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The Bottom Line: A 20% drop in overall sales leads to Boise’s second quarter profits dropping 33% for the quarter.
What the CEO said: "As we close out the first half of 2023, we are encouraged by the resiliency of market demand despite ongoing economic uncertainties, and our long-term view of the strength of residential construction remains,” said Nate Jorgensen, CEO of Boise Cascade.
In its second quarter financial report, the company pointed to the current housing climate as a catalyst for decreased figures.
“Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity, and light commercial construction,” the company said. “U.S. housing starts in June 2023 were approximately 1.4 million on a seasonally adjusted annual rate basis, as reported by the U.S. Census Bureau. However, home affordability remains a challenge for consumers, and the Federal Reserve's ongoing actions in response to inflationary data and what impacts these actions have on future mortgage rates and the broader economy will influence the near-term demand environment.”
Company Info: Click here to read the full second quarter 2023 financial report from Boise Cascade.
