August 10, 2011 / 2:43 PM / 7 years ago

UPDATE 2-AbitibiBowater Q2 tops; sees gradual rise in pulp demand

* Q2 adj EPS $0.71 vs est $0.24

* Q2 revenue $1.2 bln vs est $1.16 bln

* Shares up 9 pct (Adds details from conf call; updates share mvt)

Aug 10 (Reuters) - Newsprint maker AbitibiBowater Inc posted market-topping quarterly profits on higher pulp and paper products prices and said it expects to perform better for the rest of the year, sending the company’s shares up 9 percent.

“As we entered the third quarter, pulp buying around the world, and particularly in China, began to slow... but we continue to expect demand and pricing to stabilize later in the year,” Chief Executive Richard Garneau said in a call.

The company, which emerged from bankruptcy protection in December, said it expects better performance at its operations for the rest of the year, despite uncertainty in economic conditions.

Globally, newsprint demand fell about 5 percent through June, said CEO Garneau, who joined AbitibiBowater in December and is an industry veteran with skills at controlling costs.

“Although volatile, we continue to expect underlying growth in consumption in many of these offshore markets,” he said, adding that a 9 percent drop in Asian demand was largely due to Japan’s tsunami and earthquake, and softness in China.

Abitibibowater, which also produces coated mechanical and specialty papers, pulp and wood products, forecast capital spending to rise to about $120 million for the year.

April-June profit was $61 million, or 63 cents a share, compared with a loss of $297 million, or $5.15 a share, a year ago.

Excluding items, the company, which is North America’s largest newsprint maker, earned earned 71 cents a share, topping analysts’ forecast of 24 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose slightly to $1.2 billion, above estimates of $1.16 billion.

Shares of the company were up 9 percent to touch a high of C$16.79 on Wednesday on the Toronto Stock Exchange. Its U.S.-listed shares were up 4 percent at $16.40. (Reporting by Aftab Ahmed and Gowri Jayakumar in Bangalore; Editing by Joyjeet Das)

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