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West Fraser (WFG) to Shut Down Its Fraser Lake Sawmill
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West Fraser Timber Co. Ltd. (WFG - Free Report) announced the permanent closure of its sawmill in Fraser Lake, British Columbia, after an orderly wind-down. The decision followed WFG’s announcement that it would close its sawmill in Maxville, FL, and indefinitely suspend operations in Huttig, AR, by the end of January. These moves better align the company's capacity in the United States with demand.
The decision to close the Fraser Lake Sawmill stems from West Fraser's inability to obtain commercially viable fiber in the region. The mill's closure will lower the company's Canadian timber capacity by roughly 160 million board feet.
The closure will impact 175 employees. West Fraser plans to reduce the impacts on affected employees by providing job opportunities at other company operations.
The company believes that these actions, together with the plan to divest three pulp facilities and acquire Spray Lake Sawmills in 2023, will better position West Fraser.
In the third quarter of 2023, WFG’s total sales were $1.7 billion compared with $1.6 billion in the year-ago quarter. The lumber segment’s adjusted EBITDA was $44 million.
The company continued to face challenging demand markets in the third quarter, particularly in the lumber segment, wherein it executed curtailments at several locations for planned capital upgrades and customer needs.
WFG expects total timber shipments in 2023 to be in line with that reported in 2022.
However, the company expects its financial flexibility and low cost position to continue to provide it with a competitive edge that will position it well to capitalize on the opportunities that lie ahead.
Price Performance
Shares of the company have gained 7.4% over the past year compared with the industry's 2.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
West Fraser currently carries a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $3.96 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 71.2% in a year.
The Zacks Consensus Estimate for Ternium’s 2024 earnings is pegged at $8.00 per share. It has an average trailing four-quarter earnings surprise of 38.6%. TX’s shares have gained 36.5% in a year.
Osisko Gold has an average trailing four-quarter earnings surprise of 13.4%. The Zacks Consensus Estimate for OR’s 2024 earnings is pegged at 48 cents per share. Earnings estimates have moved 4% north in the past 60 days. OR shares rallied 13.4% last year.
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West Fraser (WFG) to Shut Down Its Fraser Lake Sawmill
West Fraser Timber Co. Ltd. (WFG - Free Report) announced the permanent closure of its sawmill in Fraser Lake, British Columbia, after an orderly wind-down. The decision followed WFG’s announcement that it would close its sawmill in Maxville, FL, and indefinitely suspend operations in Huttig, AR, by the end of January. These moves better align the company's capacity in the United States with demand.
The decision to close the Fraser Lake Sawmill stems from West Fraser's inability to obtain commercially viable fiber in the region. The mill's closure will lower the company's Canadian timber capacity by roughly 160 million board feet.
The closure will impact 175 employees. West Fraser plans to reduce the impacts on affected employees by providing job opportunities at other company operations.
The company believes that these actions, together with the plan to divest three pulp facilities and acquire Spray Lake Sawmills in 2023, will better position West Fraser.
In the third quarter of 2023, WFG’s total sales were $1.7 billion compared with $1.6 billion in the year-ago quarter. The lumber segment’s adjusted EBITDA was $44 million.
The company continued to face challenging demand markets in the third quarter, particularly in the lumber segment, wherein it executed curtailments at several locations for planned capital upgrades and customer needs.
WFG expects total timber shipments in 2023 to be in line with that reported in 2022.
However, the company expects its financial flexibility and low cost position to continue to provide it with a competitive edge that will position it well to capitalize on the opportunities that lie ahead.
Price Performance
Shares of the company have gained 7.4% over the past year compared with the industry's 2.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
West Fraser currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Ternium S.A. (TX - Free Report) and Osisko Gold Royalties Ltd (OR - Free Report) . CRS and TX sport a Zacks Rank #1 (Strong Buy), and OR carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $3.96 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 71.2% in a year.
The Zacks Consensus Estimate for Ternium’s 2024 earnings is pegged at $8.00 per share. It has an average trailing four-quarter earnings surprise of 38.6%. TX’s shares have gained 36.5% in a year.
Osisko Gold has an average trailing four-quarter earnings surprise of 13.4%. The Zacks Consensus Estimate for OR’s 2024 earnings is pegged at 48 cents per share. Earnings estimates have moved 4% north in the past 60 days. OR shares rallied 13.4% last year.