Solid second-quarter earnings and a continued rebound in the U.S. housing market have prompted investment dealers Salman Partners Inc. to bump Canfor stock into a buy rating. The investment dealer had previously rated Canfor stock “under review.”
Canfor recently reported second-quarter net income of $110.3 million ($0.77 per share), up from $61.9 million ($0.43 per share) in Q1 2013. By contrast, Canfor’s Q2 income in 2012 was just $2.6 million ($0.02 per share).
Canfor’s total income for the first half of 2013 is $172 million.
Canfor’s operating income increased 28.2% quarter over quarter, Salman Partners reports, “largely due to lumber segment results that strengthened on increased shipments volumes and lower unit manufacturing costs.”
The increased profits come mostly from Canfor’s lumber division, although pulp markets are also improving.
“We remain very bullish on the improving fundamentals of lumber producers, and Canfor has been aggressive both in terms of discretionary sawmill capex as well as on the M&A front,” Rajiv Mukhi, an investment analyst for Salman Partners, said in a recent snapshot.
