May 13, 2010 / 4:48 PM / in 7 years

UPDATE 2-Cascades breaks even on high raw-material costs

* Q1 EPS C$0.00 vs est C$0.08

* Q1 rev fell 3 pct to C$942 mln

* Sees rebound in profitability by Q2

* Names new CFO

* Shares down 9 pct (Recasts; adds details, conference call details, analyst comments and updates share movement)

By Arnika Thakur

May 13 (Reuters) - Packaging and paper-products company Cascades Inc (CAS.TO) broke even in the first quarter and missed estimates, hurt by a sharp rise in input costs, sending its shares down as much as 9 percent.

Separately, the company named Vice-President Allan Hogg chief financial officer, replacing Christian Dube, effective May 14.

Dube will stay on as vice-president, business development.

The company said it sees a rebound in profitability by the second quarter as it increases selling prices of its products.

For the first quarter, profitability was affected by a rise in costs of recycled fibre and pulp.

"These fibre costs are now relatively stable and we now expect improved results in the next quarter," the company said on a conference call with analysts.

Also, the publication price of old corrugated containers (OCC), the main grade of recycled fibres consumed by Cascades, which touched record highs in March, is now down.

OCC prices are still significantly higher than the five-year average and that will weigh on things going forward, RBC Capital Markets analyst Paul Quinn said by phone.

Quinn, who has an "outperform" rating on Cascades stock, said increased selling prices will offset costs and sees a strong year for the company.

Q1 MISSES ESTIMATES

For the first quarter, the company broke even on a per share basis, compared with earnings of 38 Canadian cents a share a year ago.

Revenue for the quarter fell 3 percent to C$942 million.

Analysts on average were expecting earnings of 8 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Shares of the company were trading down 8 percent at C$6.74 Wednesday afternoon on the Toronto Stock Exchange. They touched a low of C$6.65 earlier in the session. (Reporting by Arnika Thakur in Bangalore; Editing by Unnikrishnan Nair and Don Sebastian)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below