UPDATE 3-Norbord Q2 beats, confident of future; shrs jump

* Q2 EPS $0.81 vs est. $0.48

* Q2 rev $278 mln vs est. $249.1 mln

* Says U.S. housing recovery taking hold

* Shares up 12 pct
(Adds analyst comment, details, updates share movement)

By Isheeta Sanghi

BANGALORE, July 22 (BestGrowthStock) – Norbord Inc’s (NBD.TO: )
quarterly profit breezed past market estimates, helped by the
run-up in North American oriented strand board (OSB) prices,
and the Canadian wood-based panels producer said it remained
confident of the future, sending its shares up 12 percent.

The company said North Central benchmark OSB prices ranged
from $195 to $395 and averaged $295 in the second quarter. In
the South East region — where over half of Norbord’s North
American capacity is located — prices averaged $277, the
company added.

Overall demand outstripped the ability of both OSB
producers and distributors to increase supply, resulting in the
surge in prices, which peaked at over $300 in May, before
retreating to more sustainable levels.

“A housing recovery is taking hold and we remain confident
that our financial performance will continue to improve on the
prior year,” Chief Executive Barrie Shineton said in a
statement.

New U.S. home construction hit its lowest level in eight
months in June, further evidence the economy lost momentum in
the second quarter, but a rise in permits offered hope of a
pick up in homebuilding. [ID:nN20249501]

Desjardins Securities analyst Pierre Lacroix told Reuters,
“We expect from the current point that we will see stabilizing
to gradual improvement (in the U.S. housing market).”

He has a “buy” rating and C$18 price target on Norbord
shares.

Actual year-to-date U.S. housing starts were 14 percent
higher than last year and Norbord’s second-quarter North
American OSB sales volume to its three core market segments
rose 35 percent over the first quarter of the year, the company
said.

However, CEO Shineton said the recovery in both U.S.
housing starts and OSB demand is fragile.

In the United Kingdom, year-to-date housing starts improved
more than 75 percent over last year, supporting stronger panel
demand. European OSB prices rose 14 percent sequentially due to
high plywood prices, lower imports from the United States and
stronger demand.

The company said as market and economic conditions warrant,
it expects to curtail production when necessary to conserve
cash, manage inventory and maximize operating results.

OSB PRICES BOOST Q2

Norbord, one of the world’s largest producers of OSB,
posted a second-quarter profit (Read more your timing to make a profit.) of $37 million, or 81 cents a
share, compared with a loss of $18 million, or 42 cents a
share, a year earlier.

Net sales for Norbord, which also manufactures plywood and
a range of other engineered wood products, rose 60 percent to
$278 million.

Analysts on average had expected a profit of 48 cents a
share, before items, on revenue of $249.1 million, according to
Thomson Reuters I/B/E/S.

Norbord’s operating North American OSB mills ran at nearly
full capacity in the latest second quarter, up from 85 percent
in the first quarter, and 80 percent a year earlier.

Shares of the company, which have gained 17 percent in
value over the past year, were up 8 percent at C$12.67 Thursday
on the Toronto Stock Exchange. They had touched a high of
C$12.90 earlier in the session.

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(Reporting by Isheeta Sanghi; Editing by Unnikrishnan Nair)

UPDATE 3-Norbord Q2 beats, confident of future; shrs jump