Temple-Inland Inc. (NYSE:TIN), a manufacturing company focused on corrugated packaging and building products, shot into the red Tuesday after it reported worse-than expected second quarter earnings, impacted by unanticipated mill outages and low inventory levels.
The Austin, Texas-based company posted net income of $20 million, or 18 cents a share, compared with $66 million, or 61 cents a share, in the same quarter last year.
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Excluding special items, earnings per share were 19 cents, down significantly from average analyst estimates of 32 cents, according to a Thomson Reuters poll.
The company posted revenues totaling $976 million, up from $906 million a year ago, and beating the Street’s view of $969.6 million.
Temple-Inland CEO Doyle R. Simons said maintenance outages in its Rome, Georgia, mill and other unscheduled week-long outages in Kentucky and Indiana negatively impacted revenue by $11 million.
“The outages also affected inventories, which are at unprecedented low levels and well below our practical minimum,” he said. “As a result, we were forced to make unscheduled outside purchases of containerboard and incur additional freight costs, negatively affecting earnings by an additional $9 million in the quarter.”
Despite the worse-than expected results, the company said it is positioned for a strong second half of 2010 in its corrugated packaging segment, as it expects to benefit from higher prices, box plant transformation and less mill maintenance downtime, Simons said.