Wet weather conditions and a slow housing market dampened second-quarter profit for Deltic Timber Corp. of El Dorado, the real estate and timber company reported Wednesday.
The publicly traded company (NYSE: DEL) reported quarterly profit of $800,000, or 7 cents per share, down 85 percent from $5.3 million, or 42 cents per share, in the same quarter last year.
In a news release, the company said wet weather conditions resulted in reduced demand for building products. That led to reduced sales volumes and lower average sales prices for lumber and medium-density fiberboard.
“The company’s financial performance for the quarter was significantly affected by the negative impact of both a slower-than-expected recovery of the single-family residential housing market in the United States and wet weather conditions that slowed construction activity and resulted in weak demand for wood products,” Deltic President and CEO Ray Dillon said.
Each of the company’s segments reported operating income declines.
The Woodlands segment reported operating income of $4.9 million, down from $5.3 million, “primarily as the result of decreased oil and gas related income.” The Manufacturing segment reported operating income of $3.5 million, down from $8.7 million. Its Real Estate segment reported an operating loss of $300,000, down from income of $200,000 during the same quarter last year.
Dillon said that during the quarter, the company completed the repair of the damage caused by a fire that occurred at its Del-Tin Fiber plant in March and restarted MDF production there. It also settled related insurance claims, recording positive financial gains.
Dillon also said the company’s real estate development operations had a successful offering of the second phase in its Wildwood Place development, with 28 of 43 lots offered for sale either closed or under contract and scheduled to close by the end of the third quarter.
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