NEW YORK, May 8 (Reuters) - AbitibiBowater Inc ABH.N, the largest North American newsprint maker, on Thursday posted a wider first-quarter loss, hurt by poor results from its newsprint, specialty papers and wood products businesses.
The company posted a net loss of $248 million, or $4.32 a share, compared with a net loss of $35 million, or $1.19 a share, a year earlier.
Excluding items, the loss in the quarter was $3.74 a share, much larger than the loss of $2.54 a share, which Wall Street analysts were expecting the company to post.
In a note to clients, Bank of America analyst George Staphos noted that the wider-than-anticipated loss appeared to be largely due increased costs.
The newsprint industry in North America has been badly hit by the steady decline in demand, overcapacity issues and increasing cost pressures. AbitibiBowater and some of its peers have been reducing capacity and trying to push through price increases in a bid to deal with the sectors woes.
However, despite the weak results shares of the company rose on the New York Stock Exchange, partly driven by the company’s commitment to continue asset sales and improve productivity.
AbitibiBowater expects to meet its asset sales target of $500 million by the end of 2008, having achieved sales of about $220 million to date.
It is also targeting an additional $250 million in asset sales by the end of 2009 and has launched a process for the sale of its Mokpo, South Korea paper mill.
In a statement, the company said it is moving forward with additional sales including forest lands, sawmills, hydroelectric sites and other assets.
Shares of AbitibiBowater rose 57 cents, or 6 percent, to $10, in morning trade on the New York Stock Exchange. (Reporting by Euan Rocha; Editing by Steve Orlofsky and Derek Caney)