Q: Please comment on its QR . Why such a big drop of price?
5i Research Answer:
EPS was 98c vs estimates of 93c. Revenue of $688M was 5% short of estimates. EBITDA of $120M beat estimates by 2%. The dividend was raised 22%. Investors focused on the revenue miss. Higher pricing for utility poles and railway ties were partially offset by lower volumes and a decrease in residential lumber sales. Sales rose 3.5% but residential lumber sales fell 18% and industrial products fell 16%. Log sales fell 33%. Still EBITDA rose 38% year over year. The sales miss is disappointing, but this is hardly a disaster. The stock is still up 54% in a year and the miss was an excuse for some profit taking. At 13X earnings with the big dividend hike, we still like it.