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MEMPHIS - On Friday, Sylvamo Corporation (NYSE:SLVM) reported second-quarter earnings that fell short of analyst expectations, as heavy maintenance outages and unfavorable foreign exchange impacts weighed on results.
The paper company saw its shares tumble 7.5% in pre-market trading after the announcement.
The company reported second-quarter earnings of $0.37 per share, missing the analyst consensus of $0.48. Revenue came in at $794 million, below the consensus estimate of $831.74 million and down 15% YoY from $933 million in the same quarter last year. Sylvamo’s stock decline reflects investor disappointment with both the earnings and revenue misses.
"We delivered second quarter earnings in line with our outlook, overcoming a $13 million unfavorable foreign exchange impact while navigating the heaviest planned maintenance outage quarter in over five years," said Jean-Michel Ribiéras, Chairman and CEO of Sylvamo.
The company’s adjusted EBITDA was $82 million with a 10% margin, down from $90 million with an 11% margin in the first quarter. The decline was largely attributed to planned maintenance outage expenses, which increased by $39 million compared to the previous quarter.
By segment, Europe posted an operating loss of $38 million, while Latin America’s operating profit fell sharply to $2 million from $26 million in the first quarter. North America was the bright spot, with operating profit rising to $66 million from $42 million.
Looking ahead, Sylvamo provided third-quarter guidance for adjusted EBITDA of $145 million to $165 million, significantly higher than the second quarter, as the company expects to benefit from no planned maintenance outages, improved volumes, and better operational performance.
"With 85% of our full year planned maintenance outages behind us, we are positioned for a stronger performance in the second half of the year as we expect seasonally stronger demand in North America and Latin America as well as improved operational performance," Ribiéras added.
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