July 31, 2009 / 11:23 AM / 9 years ago

UPDATE 2-Norbord posts Q2 loss narrower than expected

* Q2 loss $0.04/shr vs est loss $0.06/shr

* Q2 sales fell 34 pct to $174 mln

* Shares up 1 pct (Adds analyst comments, updates share movement)

By Sakshi A Mattoo

BANGALORE, July 31 (Reuters) - Canada’s Norbord Inc NBD.TO, a producer of wood-based panels, posted a narrower-than-expected quarterly loss, helped by lower input prices and cost cuts.

“Third quarter will likely show some improvement..., we have seen little bit of an uptake in most of the housing data and oriented strand board (OSB) prices are slowly coming up,” RBC Capital Markets analyst Paul Quinn said.

Norbord is doing well compared with its peers, since it has a low cost base, the analyst said.

For the second quarter, Norbord reported a loss of $18 million, or 4 cents a share, compared with a loss of $36 million, or 24 cents per share, in the year-ago quarter.

Analysts on average were expecting the company to post a loss of 6 cents a share, excluding items, according to Reuters Estimates.

Net sales fell 34 percent to $174 million.

“The seasonal improvement in North American OSB prices materialized in the quarter, although it was delayed until the end of June and the price increase was muted relative to last year,” Chief Executive Barrie Shineton said in a statement.

Norbord said its European operations generated positive earnings before interest, taxes, depreciation, and amortization (EBITDA), while North American EBITDA loss reduced by 50 percent from the first quarter.

Capital investments totaled $3 million in the second quarter and are not expected to exceed $15 million in 2009, the company said.

Norbord’s competitors include West Fraser Co Ltd (WFT.TO), Canfor Corp (CFP.TO) and Tembec Inc TMB.TO.

Shares of the Toronto, Ontario-based company were up 1 percent at C$1.00 Friday on the Toronto Stock Exchange. (Editing by Ratul Ray Chaudhuri and Unnikrishnan Nair)

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