Boise Cascade talks modest growth
Boise Cascade Company saw slight movement in sales during the third quarter, though its Building Materials Distribution segment had its best quarter since 2006.
"Both of our businesses delivered good volume growth in our key product lines during the quarter, but weak commodity prices constrained our top-line revenue growth," said CEO Tom Corrick. "Despite the product pricing headwinds, Building Materials Distribution performed well and delivered its best quarter since 2006. In Wood Products, double digit declines in plywood and lumber prices overshadowed our improved operating performance in the quarter. As we start the fourth quarter, we continue to believe the underlying demand for new residential construction will show modest annual improvement in 2015 and 2016 and we remain confident we are well positioned to take advantage of market opportunities."
Net sales of $991.6 million for the third quarter ended Sept. 30 represented a 1% increase from last year's $983.3 million.
Additionally, net income came in at $22.0 million, down fairly significantly from $32.3 million in the third quarter of 2014.
Though Wood Products were down roughly 4% in sales, Building Materials Distribution pulled in $799.0 million, up 3% from last year's $773.4 million.
For the remaining fiscal year, Boise Cascade's outlook involves seasonally slower demand in the fourth quarter.
"On an annual basis, housing starts in the U.S. continue to show modest improvement and we remain optimistic that the improvement in demand for our products will continue through 2016, but at forecasted levels below the 20-year historical average," said the company in a statement. "We expect to manage our production levels to our sales demand, which will likely result in operating some of our facilities below their capacity until demand improves further. Composite structural panel and lumber prices have been historically volatile and are well below prior year levels as we begin the fourth quarter. Future commodity product pricing could be volatile in response to industry capacity restarts and operating rates, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns."