After two quarters of bleeding red ink, Canfor Corp. (TSX:CFP) is back in the black, thanks to a recovering U.S. housing market and subsequent increasing demand for lumber.
The sustainable wood producer reported a net income of $4.5 million ($0.03 per share) on consolidated revenue of $701 million in its second-quarter financials, prompting Salman Partners to increase its share price target for the company to $12 per share from $11.50.
Canfor reported a net loss of $16.2 million ($0.11 per share) in first quarter of 2012.
The improved revenues are the result of improving U.S. market for B.C. lumber, and a backlog of lumber inventory in China coming back down to normal levels, the company said in a press release.
Canfor recently acquired two sawmills in the Kootenay region, which helped the company increase lumber shipments significantly over the previous quarter to 1.2 billion board feet – a 16% increase.
Canfor, which is headquartered in Vancouver, owns 22 sawmills, pulp mills and wood product manufacturing plants in B.C. It also owns one lumber mill in Quebec and five plants in the U.S.
