MONTREAL- Railroad tie and utility pole manufacturer Stella-Jones reports sales of $594.2 million second quarter, up 5.5 percent from the year ago. Net income was $48.9 million, down from $54.7 million last year.
The performance was driven by higher railway tie volume boosted by early deliveries for orders, said Brian McManus, CEO.
"Healthy demand in the utility pole category reflects sales synergies stemming from Stella-Jones' expansion in the southeastern United States over the past two years," said McManus. Stella-Jones acquired Boatright Railroad Products, an Alabama manufacturer of railroad ties, in 2014.
Railway tie sales amounted to $214.2 million, compared with sales of $216.3 million in last year's second quarter. Excluding the conversion effect, railway tie sales decreased approximately $10.4 million, or 4.8 percent in the period, as lower pricing was partially offset by increased volume due to the early delivery of certain tie orders.
Utility pole sales reached $167.5 million in the second quarter of 2017, representing an increase of 17.3 percent over sales of $142.8 million a year ago. Excluding the contribution from acquisitions and the currency conversion effect, sales increased approximately $3.7 million, or 2.6 percent, reflecting organic sales growth in the southeastern United States.
Sales in the residential lumber category remained stable, reaching $153.2 million in the second quarter of 2017, versus $152.1 million a year earlier. This stability reflects higher selling prices due to increased untreated lumber costs, offset by lower volumes as a result of less favourable weather in Canada during the second quarter of 2017 compared to the same period last year.
Stella-Jones Inc. (TSX:SJ) is a leading producer and marketer of pressure treated wood products. It supplies North America's railroad operators with railway ties and timbers, and the continent's electrical utilities and telecommunication companies with utility poles. Stella-Jones also manufactures and distributes residential lumber and accessories to retailers for outdoor applications, as well as industrial products for construction and marine applications.