July 29, 2010 / 10:21 PM / 7 years ago

UPDATE 1-Canfor Q2 profit beats, warns on US housing demand

* Q2 adj EPS C$0.20 vs est C$0.15

* Sales up 10 pct to C$634.7 mln

* Sees continued weakness in U.S housing recovery

July 29 (Reuters) - Canadian forest products company Canfor Corp (CFP.TO) posted quarterly profit above analysts’ estimates, but expects mortgage delinquencies, home foreclosures and a weak employment market to continue to hit U.S. housing recovery.

For the second quarter, the company reported net income of C$18.1 million attributable to its equity shareholders, or 13 Canadian cents a share, compared with C$10.5 million, or 7 Canadian cents a share, a year ago.

The company reported adjusted net income of 20 Canadian cents a share.

Canfor’s sales rose about 10 percent to C$634.7 million.

Analysts on average expected the company to earn 15 Canadian cents on a revenue of C$667 million, according to Thomson Reuters I/B/E/S.

The company said the price rally in solid wood which started in early 2010, abruptly ended in the latter part of the quarter, bringing down the lumber prices, partly hurt by the stalling U.S. housing recovery.

However, Canfor said that it expects North American lumber demand would improve slightly as the seasonal fall building season gets underway.

Shares of the company closed at C$8.15 Thursday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Aradhana Aravindan)

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