Quarterly Results Find Mixed Numbers for Comapnies

Newsprint Producer Reports Steep Loss for Quarter

Abitibi-Consolidated Inc. reported today third quarter operating income from continuing operations of $29 million compared to $94 million recorded in the second quarter of 2002 and $207 million for the same period last year.

The company attributed to decline to lower lumber pricing, countervailing and anti-dumping duties being imposed for the full quarter, higher lumber costs associated with downtime and the fact that the second quarter included a $32 million duty reversal.

The company also noted that in the paper segment of its business higher recovered paper costs were offset by improved volumes in both newsprint and value-added grades as well as the implementation of a $50 a metric ton increase for finished newsprint Aug. 1.

Net earnings in the third quarter were $77 million versus a loss of $83 million in the same quarter of 2001.

For the nine months ended September 30, the company's net earnings amounted to $230 million compared to $127 million for the same nine months of 2001.

"Despite the pressures on both paper and lumber markets in the third quarter, we saw the first positive newsprint pricing movement in more than 18 months," said John Weaver, president and CEO. "We sold Saint-Felicien at an attractive price and reduced our debt significantly as a result. We took 210,000 metric tons of market-related newsprint downtime in North America in the quarter and, thanks to our skilled team, we kept a good handle on the fundamentals."

Also during the quarter, Abitibi-Consolidated  completed the conversion of its Thorold, Ontario mill to produce 100% recycled newsprint. The project was completed on schedule and below the original $50 million budget.

Weyerhauser Reports Steep Drop in Earnings

Weyerhaeuser Co. reported net earnings for the third quarter of $13 million. This compares with net earnings of $91 million for the same period last year.

"Our earnings reflect the challenging market conditions during the quarter," said Steven Rogel, chairman, president and CEO. "The wood product markets continue to be a concern and we are taking steps to address the situation.

"As we look to the fourth quarter, we see some modest improvement in the paper and containerboard businesses, and our real estate business is maintaining a strong backlog of sold, but undelivered, houses." Rogel said. "We are making excellent progress in capturing the synergies from the Willamette acquisition and taking other actions to accelerate reductions in overhead costs."

For the paper and paperboard segment, changes in earnings between the second and third quarter of 2002 were due primarily to higher OCC costs, which were partially recovered by price increases for linerboard and corrugating medium. Second quarter earnings also include $28 million in pre-tax costs associated with previously announced closures.

As part of the company's focus on rationalizing its containerboard production, Weyerhaeuser announced the permanent closure of the Hawesville, Ky., containerboard mill during the third quarter to eliminate approximately 200,000 tons of production.

Fourth quarter Containerboard, Packaging and Recycling earnings should be higher as box price increases become effective and OCC prices decline from the peak levels of the early summer.

Smurfit-Stone Sees Improvement for Quarter

Smurfit-Stone Container Corp. reported income of $37 million, from continuing operations before extraordinary item, for the third quarter of 2002, compared with year ago results of $28 million. The 2002 results include restructuring and other charges related to the sale or closure of three facilities. Net income available to common stockholders was $43 million. This includes income from discontinued operations of $2 million, a gain from the company's sale of the industrial packaging group of $22 million, and an extraordinary loss from the early extinguishment of debt of $16 million.

Sales for the third quarter of 2002 were $2.106 billion, compared to $2.059 billion a year ago.

For the nine months ended September 30 Smurfit-Stone reported income from continuing operations of $70 million, compared with year ago levels of $62 million. Sales for the nine months ended September 30 were $6.027 billion, compared with $6.296 billion last year.

Commenting on the quarter, Patrick Moore, president and CEO, said that these results reflected improved shipments, higher containerboard production and improving prices. "We increased containerboard and container prices during the quarter. In the third quarter, year-over-year box shipments were up 4.5 percent, outpacing industry levels," said Moore. The results for the quarter were negatively impacted by higher recycled fiber costs.

"The third quarter was eventful for Smurfit-Stone. We divested a non-core business, the industrial packaging group. In addition, we completed a major acquisition, the Stevenson, AL, medium mill and associated operations from MeadWestvaco," said Moore. "With Stevenson, the company acquired a world-class mill, and we expect to realize a minimum of $40 million in synergies."

In late August, the company also purchased two converting plants from Packaging Services Group, expanding important high graphics capabilities in the Northeast, Moore said.