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Boise (BZ) 4Q Earnings Drop 16.7 Pct, Miss Estimates

 February 26, 2013 12:00 PM

(By Balaseshan) Boise Inc. (NYSE: BZ), a manufacturer of packaging and paper products, reported a 16.7% decline in quarterly earnings due to higher costs and expenses as well as margin compression in certain Packaging operations and declining prices in its Paper business.

Earnings for the fourth quarter were $13.55 million or $0.13 per share, lower than last year's $16.26 million or $0.15 per share. Excluding special items, earnings per share (EPS) declined to $0.14 from $0.17.

Sales increased to $627.49 million from $600.44 million.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.19 per share on revenue of $633.77 million for the fourth quarter.

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In the previous third quarter, the company posted EPS excluding special items of $0.23 on sales of $645.19 million.

Packaging sales grew 14% to $287.3 million, as a result of its acquisition of Hexacomb on December 1, 2011 as well as sales volume growth in its network of box plants.

Paper sales declined 2% to $352.7 million, due to lower uncoated freesheet sales prices. Average sales price of uncoated freesheet declined to $948 per short ton from $993 per short ton, as industry supply continued to outpace demand.

The company said the decline in average price for uncoated freesheet factored heavily into its decision to cease paper production at its mill in St. Helens, Oregon, reducing its production capacity in 2013 by 60,000 tons.

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"Going forward, we will continue to aggressively manage our costs and evaluate the optimal configuration of our white paper assets, to balance our production with demand for our products," said Alexander Toeldte, president and chief executive officer of Boise.

BZ is trading down 3.73% at $8.26 on Tuesday. The stock has been trading between $6.39 and $9.18 for the past 52 weeks.

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