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 user 2003-10-10 at 1:50:00 pm Views: 108
  • #7674
    Boise Cascade looks to Office Supplies for Boost
    Boise Cascade, whose products range from building materials to office supplies, said on Wednesday it expected third-quarter earnings would be up to 80 per cent above market estimates, helped by the surging US housebuilding market.

    Pre-announcing results for the quarter, which will be released in full on October 21, Boise said it expected earnings per diluted share from operations of 40-44 cents, against the consensus forecast in a poll by Reuters Research of 24 cents. The forecast lifted Boise’s shares just over 2 per cent to $28.17 by the close of trade.

    Boise said it had experienced “sharply higher results” from its building products operations, while office equipment and materials sales had also strengthened from the second quarter. However, market conditions continued “sluggish” in the paper business, Boise said, with lower average paper prices offset by higher sales volumes and lower unit costs.

    Boise is still battling analyst doubts over its plan to focus on the sale and distribution of office products, while divesting forest products assets to pay down debt. In July Boise agreed to pay $1.25bn in cash and stock for OfficeMax, the US office products retailer.

    Earlier this week Moody’s, the credit rating agency, cut Boise’s debt ratings to junk status. The company’s change in strategy would expose Boise to increased business risk as it went head-to-head with Staples, Office Depot and other “big box” retailers, Moody’s warned. “However, the transaction positions Boise as a close number three in market share and provides opportunities to capture synergies,” it added.