Lower lumber prices meant weaker earnings results for West Fraser Timber (TSX:WFT), which released its third quarter results October 28.
The company is reporting earnings of $57 million or $1.29 per share. This is a drop from the second quarter results, when West Fraser reported earnings of $109 million, the effect of historically high lumber prices seen in the first quarter of 2013.
Those prices then plummeted, but have been gradually rising ever since.
Continuing lumber price volatility and a United States housing market that is still only slowly recovering both contributed to the company's weaker performance in the third quarter, said the company.
Pulp prices, which had been low recently, are now rising.
"Our third quarter results reflect lower lumber prices offset somewhat by improved pulp prices compared with the previous quarter," said Ted Seraphim, president and CEO of West Fraser.
Last week, West Fraser announced it would be exchanging timber rights with Canfor (TSX:CFP). West Fraser will close a sawmill in Houston, while Canfor will close its sawmill in Quesnel.
The companies said the move was in response to the mountain pine beetle epidemic, and that the deal will ensure that the sawmills that continue to operate will have a more assured supply of timber.
