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Recently combined AbitibiBowater swings to 4Q loss, plans to cut costs

Recently combined AbitibiBowater swings to 4Q loss, plans to cut costs

AbitibiBowater Inc., which was recently formed by the merger of two paper and wood products businesses, on Thursday said it recorded a fourth-quarter loss ahead of plans to announce new cost-cutting efforts.
AbitibiBowater was formed from U.S. newsprint maker Bowater Inc.'s October acquisition of Canadian forest products company Abitibi-Consolidated LLC.
The combined company booked fourth-quarter losses of $250 million (euro165.33 million), or $5.09 (euro3.37) per share. In the year-ago period, Bowater recorded income of $107 million (euro70.76 million), or $3.58 (euro2.37) per share.
Excluding restructuring-related charges, merger costs and other special items, AbitibiBowater's fourth-quarter loss totaled $115 million (euro76.05 million), or $2.34 (euro1.55) per share. Bowater posted an adjusted loss of $15 million (euro9.92 million), or 50 cents per share, in the prior-year period.
AbitibiBowater recorded quarterly revenue of $1.49 billion (euro0.99 billion). Bowater posted revenue of $861 million (euro569.41 million) in the fourth quarter of 2006.
Analysts surveyed by Thomson Financial forecast a fourth-quarter loss of $2.67 (euro1.77) per share on sales of $1.65 billion (euro1.09 billion). Analyst estimates typically exclude one-time items.
Facing declining demand for newsprint and other products, AbitibiBowater said in November it plans to close four paper mills, idle operations at others, and suspend its shareholder dividend.
"While markets for wood products remain challenging, market conditions for pulp and paper products are improving significantly and we are pleased with our ongoing progress to make our company a more globally competitive organization," said Executive Chairman John W. Weaver in a statement.
AbitibiBowater said it expects to announce plans for cost reductions in its paper and wood products segments during the second quarter.
"In order to remain a competitive, viable supplier and provide our stakeholders with appropriate returns, we must significantly improve the margins for our products. Our recently announced price increases were a successful step," said President and Chief Executive David J. Paterson.
For the full fiscal year, AbitibiBowater reported a loss of $490 million (euro324.05 million), or $14.11 (euro9.33) per share. Bowater recorded a loss of $138 million (euro91.26 million), or $4.64 (euro3.07) per share, in fiscal 2006.
Excluding one-time items, the combined company booked a loss of $267 million (euro176.58 million), or $7.69 (euro5.09) per share, in the latest quarter. Bowater posted an adjusted loss of $64 million (euro42.33 million), or $2.15 (euro1.42) per share, in 2006.
Full-year sales were $3.88 billion (euro2.57 billion). Bowater generated $3.53 billion (euro2.33 billion) in sales the prior year.
Analysts forecast a 2007 loss of $7.41 (euro4.90) per share on sales of $5.24 billion (euro3.47 billion).
AbitibiBowater noted that it will not file its annual report on Friday due to reporting complications stemming from the merger. The company plans to file the report by the extended deadline of March 17.


Updated : 2021-08-05 05:04 GMT+08:00