UPDATE 1-Resolute Forest profit beats as pulp demand rises

Thu Oct 31, 2013 12:24pm EDT
 
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* Third-quarter adj EPS $0.31/shr vs est $0.25

* Expects pulp prices to remain strong in fourth quarter

* Shares rise 15 percent (Adds forecast, CEO quote, shares)

Oct 31 (Reuters) - Canada's Resolute Forest Products Inc reported a better-than-expected profit for the fourth straight quarter as demand for its pulp products improved, sending its shares up 15 percent in early trade.

Resolute, the largest newsprint maker in North America, has boosted pulp production, sold non-core paper producing assets and cut jobs since it emerged from bankruptcy in 2010.

Rising demand for tissue, particularly in China, is driving consumption of pulp, Chief Executive Richard Garneau said.

"Improvements in volume, transaction price and costs led to the best quarter our pulp segment has seen in two years, which helped to offset the effects of weaker pricing for lumber and excess supply in paper grades," Garneau said in a statement.

Garneau said he expects prices of pulp, which is also used to make disposable diapers, to go up in the current quarter, after rising $5 per metric ton in the third quarter.

The company's pulp business earned $21 million in operating income in the third quarter, the highest among its five industrial units.   Continued...