August 12, 2010 / 12:12 PM / 8 years ago

UPDATE 1-Stella-Jones profit falls on weaker utility pole sales

* Q2 C$0.35 vs C$0.87 yr ago

* Total sales rise 30 pct

* Says railway tie market improving gradually

Aug 12 (Reuters) - Stella-Jones Inc (SJ.TO), a maker of treated wood products, reported a 49 percent drop in quarterly profit, hurt mainly by weaker utility pole sales, but said the railway tie market was gradually improving.

“We expect current trends to positively reflect on our second half results,” Chief Executive Brian McManus said in a statement.

The company, which supplies poles and railroad ties by treating wood it buys from sawmills, however, said the utility pole market remains soft with lingering pricing pressures in the United States.

For the second quarter, net income fell to C$5.6 million ($5.35 million), or 35 Canadian cents a share, from C$11.0 million, or 87 Canadian cents a share, a year ago.

The latest results include non-recurring expenses of about C$5.4 million, the company said.

Sales rose 30 percent to C$167.3 million. Sales of utility poles fell 12 percent to C$38.7 million.

Analysts on average expected earnings of 84 Canadian cents a share, on revenue of C$172.8 million, according to Thomson Reuters I/B/E/S.

Shares of the company, which have gained 11 percent in the last one year, closed at C$27.70 Wednesday on the Toronto Stock Exchange. ($1=1.046 Canadian Dollar) (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Gopakumar Warrier)

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