AbitibiBowater Inc., doing business as Resolute Forest Products, today reported net income of $23 million for the first quarter, or $0.23 per share, on sales of $1.1 billion. This compares with net income of $30 million, or $0.31 per share, on sales of $1.2 billion in the first quarter of 2011.
Excluding $16 million of special items described below, net income for the quarter was $7 million, or $0.07 per share. Net income excluding special items for the first quarter of 2011 was $10 million, or $0.10 per share.
"Our balance sheet continued to strengthen despite seasonal softness and market headwinds," said Richard Garneau, president and chief executive officer. "We demonstrated the discipline that sets us apart by taking market-related downtime to control finished goods inventory and by advancing annual pulp mill major maintenance to the first quarter from the second."
The newsprint segment generated operating income of $21 million, a $5 million decrease from the fourth quarter of 2011. The decrease reflects a 9% seasonal reduction in shipments and the stronger Canadian dollar, largely offset by lower input costs, mainly recovered paper and power. The average transaction price remained unchanged and inventories were stable as the Company took 85,000 metric tons of production downtime.
Operating income in the coated papers segment was $14 million lower in the first quarter than in the previous quarter, resulting in an operating loss of $1 million. Shipments were stable but the average transaction price declined approximately $30 per short ton on weaker market conditions. Costs increased by $56 per short ton, primarily as a result of the annual maintenance outage in Catawba, South Carolina.
The specialty papers segment generated operating income of $15 million, down from $24 million in the previous quarter. Shipments were down 13% from the seasonally stronger fourth quarter and operating costs were higher due to a stronger Canadian dollar, offset in part by lower maintenance costs. The average transaction price remained stable, notwithstanding a decline in market demand to which the Company responded with approximately 36,000 metric tons of production downtime.
Operating loss in the market pulp segment was $21 million, compared to operating income of $12 million in the previous quarter. The average transaction price continued its downward trend, falling another $38 per metric ton in the first quarter. Results also included an $11 million charge for annual maintenance outages at two mills, including one advanced from a later quarter in light of softer demand. Shipments were essentially unchanged from the fourth quarter as the Company took production downtime of over 77,000 metric tons.