Stella-Jones Inc. (TSE:SJ), a producer of pressure treated wood products, reported profit and sales growth in the fourth quarter thanks to a strong U.S. dollar, and it hiked its quarterly dividend by 40 percent.
Net income rose 19 percent to C$19.7 million, or 29 Canadian cents per diluted share, for the three months ended Dec. 31, from C$16.5 million, or 25 Canadian cents per share, in the year-earlier period, the Montreal, Quebec–based company said in a statement today.
Sales grew 33 percent to C$211.9 million from C$159.3 million.
The company attributed the sales growth to fluctuations in the value of the Canadian dollar, versus the U.S. dollar, which increased the value of U.S. dollar denominated sales by $5.8 million. Excluding these factors, sales decreased approximately $6.7 million.
Analysts were looking for earnings of 30 Canadian cents per share on revenue of C$218.1 million. Analysts' estimates typically strip out unusual items.
The board raised the company’s quarterly dividend to 7 cents per share, payable on April 30 to shareholders of record at the close on April 2.
"By virtue of recent acquisitions and key strategic decisions, Stella-Jones has not only become larger, it has become a stronger and more efficient organization," Chief Executive Officer Brian McManus said in the statement.
Looking forward, Stella-Jones projects demand for its core products "to remain healthy" in 2014.
Although "a stronger economy could result in a tighter market for untreated railway ties and utility poles, as demand for other wood-based products also increases, we believe our inventory position and the strength of our procurement network should allow Stella-Jones to meet demand at the most optimal cost," McManus said.
As at Dec. 31, the company's long-term debt stood at $372.9 million, compared with $349.6 million at the end of the previous year.
Stella-Jones shares rose 0.7 percent to C$27.04 at market close in Toronto yesterday, giving the company a market value of C$1.86 billion. The stock is down 0.8 percent this year.