Potlatch earnings rise sharply

Higher prices for wood products helped Potlatch Corp. post second-quarter earnings of $49.6 million, company officials reported Monday.

“The conditions that started the rally in wood products markets during the third quarter of 2003 – low interest rates, a strong housing market and a weaker U.S. dollar – have continued through the second quarter of 2004,” said Penn Siegel, Potlatch’s chairman.

The company’s wood products segment generated $94.4 million in operating income during the second quarter. Prices have tapered off since May, but they still remain at levels above last year’s prices, Siegel said.

Potlatch’s second quarter earnings amounted to $1.68 per share. The earnings compared to $6.6 million, or 23 cents per share, for the second quarter of 2003.

For the first six months of the year, Potlatch reported earnings of $71.4 million, or $2.42 per share.

The company’s pulp and paperboard segment also reported improved second quarter results, but its tissue division lost money due to competitive markets for toilet paper, paper towels and facial tissues.

Potlatch is based in Spokane.

• Mattel Inc.’s flagship Barbie doll brand struggled in the second quarter, but improved sales in other divisions helped the world’s largest toy maker turn in a 12 percent profit.

The company on Monday reported net income of $23.5 million, or 6 cents a share, up from $20.9 million, or 5 cents a share, a year earlier.

Analysts had been expecting earnings of 5 cents a share for the latest period, according to Thomson First Call.

Net sales were $804 million, up 5 percent over $769 million the same quarter last year. But sales of Barbie products continued to falter, dropping 13 percent worldwide. International Barbie sales dipped 11 percent, while domestic sales were down 15 percent over the same quarter a year ago.

“Our biggest challenge ahead is reinvigorating the fashion (doll) business,” chairman and chief executive Robert A. Eckert said during a conference call with analysts Monday. “We’re directing tremendous time, energy and resources to regain our momentum in the fashion doll category.”

• Black & Decker Corp. stock rose sharply Monday after the toolmaker reported strong sales gains and said it would buy Pentair Inc.’s Tools Group for about $775 million in cash.

In the second quarter ended June 27, Towson-based Black & Decker earned $121.6 million, or $1.50 a share, on revenue of $1.3 billion.

Analysts were expecting earnings of $1.26 a share, according to Thomson First Call.

In the same period last year, it earned $75.7 million, or 97 cents a share, on revenue of $1.09 billion.

Chief Financial Officer Michael Mangan attributed the improvement to “excellent retail support for our leading brands.” Results were also helped by the improved economy and by “easy” comparisons to the year-earlier period, he said.

New York Stock Exchange-listed Black & Decker shares closed Monday at $67.49, up $7.17, or 12 percent.

• Corning Inc., propelled by a surge in sales of glass used in flat-screen computer monitors and televisions, recorded a $108 million profit that beat Wall Street forecasts.

The materials company, which specializes in fiber-optic and glass products, said Monday it earned the equivalent of 7 cents a share in the April-June quarter, compared with a loss of $22 million, or 2 cents a share, a year ago.

Excluding one-time restructuring, asbestos litigation and debt-reduction charges totaling $61 million, or 4 cents a share, the company earned $169 million, or 11 cents a share. That beat the consensus forecast of 9 cents a share among analysts surveyed by Thomson First Call.

Sales jumped 29 percent to $971 million from $752 million.

The results were released after markets closed.

• Kraft Foods Inc. said Monday its second-quarter earnings fell 26 percent — its fourth straight quarterly decline — as commodity costs and marketing spending rose.

Profits at the nation’s largest food company also continued to be adversely affected by continuing costs from its six-month-old restructuring and from the low-carbohydrate diet trend, which hurt cereal sales in particular.

Quarterly earnings were $698 million, or 41 cents per share, down from $949 million, or 55 cents per share, for the second quarter of 2003.

Revenues at the maker of Oreo cookies and Philadelphia cream cheese jumped 5 percent to $8.2 billion.

The company lowered its 2004 earnings projections to between $1.55 per share and $1.62 per share, from a previous range of $1.63-$1.70 per share. But analysts surveyed by Thomson First Call already had anticipated the reduction, estimating 2004 earnings of $1.60, not counting restructuring charges.

Despite the warning, Kraft shares rose 83 cents, or 2.7 percent, to close at $31.13 Monday on the New York Stock Exchange.