October 27, 2011 / 9:30 PM / 6 years ago

UPDATE 2-Canfor Corp sees US lumber demand slowing in Q4

* Q3 adj loss/shr C$0.01 vs est loss/shr C$0.05

* Q3 revenue falls 3 pct

* Says U.S. housing remains challenging (Compares with estimates, adds outlook for lumber demand, context)

Oct 27 (Reuters) - Canadian forest products company Canfor Corp posted a narrower-than-expected quarterly loss and forecast slower lumber consumption in North America in the fourth quarter.

"The U.S. market remains challenging as the economy struggles to emerge from its slump, and there remains little prospect of a meaningful recovery in the short term," Chief Executive Don Kayne said in a statement.

The company, which owns a 50.2 percent stake in Canfor Pulp Limited Partnership , posted an adjusted loss of 1 Canadian cent a share, compared with analysts' estimates of a loss of 5 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Sales fell 3 percent to C$602.1 million, but beat market expectations of C$593 million.

"We continued to see strong shipment levels and increased demand for higher-value products in our offshore markets during the third quarter," Kayne said. He expects Japanese and Korean markets to remain stable for the rest of the year.

Canfor is one among the several pulp and lumber companies hit by low pulp prices, high inventories, rising input costs, falling Chinese demand and a dull U.S. economy, which has hurt sales of new homes.

Lumber peer West Fraser posted a sharp drop in profit on Monday, hurt by weak housing demand, while partner Canfor Pulp and paper maker Domtar warned pulp price weakness could persist.

Canfor produces oriented strand boards, which, like plywood, are commonly used to sheath roofs, walls and floors, softwood lumber and other wood products.

July-September net loss attributable to shareholders was C$21.6 million, or 15 Canadian cents a share, compared with a net income of C$9.1 million, or 6 Canadian cents a share, a year ago. (Reporting by Gowri Jayakumar in Bangalore; Editing by Viraj Nair and Don Sebastian)

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