Universal Forest Products Inc. has posted an increase of 24 percent in second quarter net sales, with increases in all four of its markets, although net earnings were $13.7 million, compared to $16.1 million for the same period a year ago.
The company reported that it has been “a volatile lumber market that dropped precipitously during the quarter, negatively affecting profits, particularly in the month of June.”
“While these numbers aren’t where we’d like them to be, they aren’t a disappointment given the most unstable lumber market I’ve seen in my 36 years with the company,” said CEO Michael B. Glenn.
“These are tough times, but we’re in an enviable position in the industry: We’re focused on growth and armed with the resources we need,” Glenn added.
Second-quarter net sales were $638.6 million, compared to $514.9 million for the same period last year. Net earnings were equal to 70 cents per diluted share, compared to 83 cents during the second quarter of 2009.
The lumber market was approximately 52 percent higher, on average, in the second quarter of 2010 compared to the same period a year ago, but with unusual volatility in the latest quarter. Lumber prices increased to a peak of $367 at the end of April and then fell to $247 by late June. Since the end of June, lumber prices have stabilized.
During the second quarter, Universal had a gross sales increase of 8.4 percent in Do-It-Yourself/retail, compared to the same quarter a year ago. Industrial packaging/components were up 36 percent; site-built construction up 19.1 percent, and manufactured housing up 82.5 percent over the same quarter a year ago.
Universal expects the “current challenging conditions” to prevail through 2010, and will not predict its performance for the foreseeable future.