Stella-Jones (TSE:SJ), a manufacturer and marketer of pressure treated wood products, boosted its quarterly dividend by 14.3 percent while reporting a lower-than-expected profit gain in the fourth quarter. Shares dropped.
Net income rose 16.6 percent to C$23.0 million, or C$0.33 per diluted share, in the October-to-December quarter, from C$19.7 million, or C$0.29 per diluted share, in the year-earlier period, the Montreal, Quebec-based company said in a statement today.
That fell short of the $0.36 average estimate of 5 analysts polled by Capital IQ.
Sales grew 30.3 percent to $289.9 million for the fourth quarter from $222.5 million for the same period last year.
"A relentless focus on improving the efficiency of our growing network partially mitigated headwinds from the tighter market for untreated railway ties that affected the industry for most of the year," chief executive officer Brian McManus said in the statement.
Sales of railway ties reached $131.1 million in the fourth quarter, versus $78.3 million last year.
The company increased its quarterly dividend to $0.08 per common share, payable on April 30 to shareholders of record at the close of business on April 2.
Moving forward, the company expected solid demand for its core products in 2015 and said it is planning further capacity additions to its network to meet future demand.
“We believe that lower oil prices will have a slightly favourable effect on Stella-Jones' overall business, as a reduction in the cost of certain raw materials should more than offset potential delays on certain projects requiring our core products,” said McManus.
Shares were down 1.2 percent at C$38.90 at 1:42 p.m. in Toronto, stretching gains in the past six months to 32 percent.