Stella-Jones (TSE:SJ) on Friday posted per share earnings that came in ahead of analysts’ expectations, though sales missed, while the company said it was hiking its dividend by 25 per cent.
For the period that ended December 31, the maker of pressure-treated wood products reported net income of $16.5 million or $1.00 per diluted share, up from $13.36 million or 83 cents per diluted share, a year earlier.
Sales totalled $159.3 million, up eight per cent from $147.5 million in the year-ago period, mostly due to the company’s McFarland operations and its Russellville facility.
Excluding the effects of currency translation as well as the McFarland and Russellville operations, Stella-Jones said that sales fell about 10 per cent due to lower advanced railway tie deliveries in the quarter and a reduction in the tie recycling business.
Analysts polled by Thomson Reuters had called for per share earnings of 93 cents on sales of $172 million.
Operating income was $21.1 million or 13.3 per cent of sales, compared with $20.4 million or 13.8 per cent of sales, a year earlier.
Stella-Jones noted that results include acquisition costs of $2.4 million related to the McFarland transaction, while results for the fourth quarter of 2011 included an impairment charge and costs related to the purchase of the Russellville facility.
Excluding these factors, operating income was $23.5 million or 14.8 per cent of sales.
Sales of railway ties were $73.7 million in the latest quarter, slightly lower than the $74.4 million reported a year earlier, reflecting lower year-over-year advanced deliveries.
Utility pole sales rose to $70.2 million, from $51.3 million in the year-ago period, due to a $13.6 million contribution from the McFarland operations and higher sales of distribution poles, Stella-Jones said.
Meanwhile, industrial product sales fell to $10.4 million, versus $19.9 million a year ago, as a result of a planned reduction in the tie recycling business. Residential lumber sales were $5.1 million, up from $3.1 million last year, mainly due to additional sales from the McFarland operations, the company said.
Separately, Stella-Jones on Thursday announced that it was increasing its quarterly dividend by 25 per cent to 20 cents per share, payable on April 30, to shareholders of record at the close of business on April 2.
Looking ahead, the company said it expects “healthy demand” for its core products in 2013.
“In the short-term, our main priority is to integrate the McFarland operations and benefit from greater market penetration, synergies and additional operating efficiencies from a larger network,” said president and CEO Brian McManus.
“We will also focus on cash flow generation in order to reduce debt, invest in initiatives that further enhance our network and maintain an optimal dividend policy to the benefit of our shareholders.”