Resolute Forest Products Inc. reported a net loss for the quarter ended September 30, 2019, of $43 million, or $0.47 per share, compared to net income of $117 million, or $1.25 per diluted share, in the same period in 2018. Sales were $705 million in the 3Q 2019, a decrease of $269 million from the year-ago period.
Excluding special items, the company reported a net loss of $34 million, or $0.37 per share, compared to net income of $96 million, or $1.03 per diluted share, in the 3Q 2018.
“Ongoing weakness in market pulp pricing had a significant impact on our quarterly results,” said Yves Laflamme, president and CEO. “While paper has come under pressure this year and lumber markets continue their slow recovery, we are pleased with the progress in sales growth and productivity gains in the tissue business, as we continue to build our position in the segment with positive EBITDA. In October, we successfully used our strong financial situation to increase and extend our senior secured credit facility by $175 million, providing us additional liquidity at very competitive terms to support our transformation initiatives. The proactive steps we have taken over the last few years to strengthen our balance sheet position us well to execute on our strategy despite the cyclical downturn currently affecting the industry.”
The company’s operating results were $153 million lower than the 3Q 2018. Overall pricing had a $111 million unfavorable impact, as the average transaction price decreased by 25% for wood products, 20% for market pulp, and 9% for newsprint. The decline in operating results also reflects the divestiture of the Catawba and Fairmont facilities, as well as an increase in manufacturing costs of $49 million, mainly due to higher fiber expense and additional planned maintenance. These unfavorable items were offset in part by lower variable compensation expense and lower depreciation due to divestitures and full amortization of certain assets.