Declining prices slice Q2 sales for Boise Cascade
Boise Cascade posted second quarter 2019 sales of $1.23 billion, down 13% from sales of $1.41 billion in the second quarter 2018.
The Boise, Idaho-based building products manufacturer and distributor also reported a second quarter net income of $27.7 million, a 34% drop from a second quarter 2018 net income of $41.8 million.
Wood Products sales, including sales to Building Materials Distribution (BMD) decreased 21%, to $334.3 million for the quarter. The company said the decline in sales was driven primarily by lower sales prices and sales volumes for plywood.
BMD's sales decreased 10%, to roughly $1.1 billion for the quarter with the decrease in sales driven by a sales price decrease of 12%, offset partially by a sales volume increase of 2%, Boise Cascade said.
Looking ahead, Boise said it expects to experience slower demand growth for its products in 2019. The company also forecast near-term residential construction growth to be flat to slightly down due to constraints faced by builders, including a lack of labor and building lots along with housing affordability concerns.
The company said it does not expect additional downward commodity price volatility, however.
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The bottom line: Price decreases lead to sales to fall 13% to $1.23 billion as earnings fall 34% to $27.7 million.
What the CEO said: “While the headwinds of low commodity products pricing and softer single-family residential starts made for challenging year-over-year financial comparisons, our businesses executed well during the second quarter. The progress we have made growing our distribution and EWP businesses is providing more stability to our earnings during periods of weak commodity pricing,” said Tom Corrick, CEO of Boise Cascade.
Company info: Excluding the impact of the acquisitions of wholesale building material distribution locations in Nashville, Tenn.; Medford, Ore.; and Cincinnati, Ohio during 2018, and a Birmingham, Ala. acquisition in 2019, BMD sales would have decreased 12%. By product line, commodity sales decreased 25%, general line product sales increased 9%, and sales of EWP decreased less than 1%. The full Boise Cascade second quarter 2019 report is available here.
The Boise, Idaho-based building products manufacturer and distributor also reported a second quarter net income of $27.7 million, a 34% drop from a second quarter 2018 net income of $41.8 million.
Wood Products sales, including sales to Building Materials Distribution (BMD) decreased 21%, to $334.3 million for the quarter. The company said the decline in sales was driven primarily by lower sales prices and sales volumes for plywood.
BMD's sales decreased 10%, to roughly $1.1 billion for the quarter with the decrease in sales driven by a sales price decrease of 12%, offset partially by a sales volume increase of 2%, Boise Cascade said.
Looking ahead, Boise said it expects to experience slower demand growth for its products in 2019. The company also forecast near-term residential construction growth to be flat to slightly down due to constraints faced by builders, including a lack of labor and building lots along with housing affordability concerns.
The company said it does not expect additional downward commodity price volatility, however.
###
The bottom line: Price decreases lead to sales to fall 13% to $1.23 billion as earnings fall 34% to $27.7 million.
What the CEO said: “While the headwinds of low commodity products pricing and softer single-family residential starts made for challenging year-over-year financial comparisons, our businesses executed well during the second quarter. The progress we have made growing our distribution and EWP businesses is providing more stability to our earnings during periods of weak commodity pricing,” said Tom Corrick, CEO of Boise Cascade.
Company info: Excluding the impact of the acquisitions of wholesale building material distribution locations in Nashville, Tenn.; Medford, Ore.; and Cincinnati, Ohio during 2018, and a Birmingham, Ala. acquisition in 2019, BMD sales would have decreased 12%. By product line, commodity sales decreased 25%, general line product sales increased 9%, and sales of EWP decreased less than 1%. The full Boise Cascade second quarter 2019 report is available here.