Shares in US timberland giant Weyerhaeuser continued their recovery after the group reported a smaller-than-expected drop in earnings, despite weak log prices and a plant outage.
The US-based group, which controls nearly 7m acres of timberland, expects log prices to rise in the July-to-September period, while wood pulp prices fall.
Weyerhaeuser reported earnings for the three months to June 30 excluding special items of $133m, down 43% from $234m over the same time last year.
This represents earnings of $0.26 a share, above analyst's expectations of a $0.20-a-share result.
The group's profit margins were hit by low log prices, which shrank earnings in the timberland segment, despite a seasonal increase in log sales volumes.
Group net sales were $1.8bn, down 8% from $1.96bn reported for the same period last year and in line with expectation.
Cellulose fibre sales were hit by an extended outage at the group's pulp mill facility, while demand for lumber was hit by a late spring, which delayed the building season.
Weyerhaeuser is expecting "slightly lower earnings" from its timberland segment in the next three months, despite rising log prices.
In the West of the US, the company forecast "lower fee harvest volumes, partially offset by higher log sales realisations, as a result of a prolonged fire season".
In the South, the group said it "anticipates increased fee harvest volumes offset by seasonally higher silviculture costs".
Over the next three months, Weyerhaeuser expects wood pulp prices to fall.
However, with the scheduled outage in the group's wood pulp capacity mostly complete, Weyerhaeuser is expecting sales in the cellulose segment to rise.
Weyerhaeuser is also expecting higher earnings and profits from its wood products segment, thanks seasonally higher sales volumes and higher lumber prices.
Weyehauser shares, which hit a 14-month low of $29.64 last week, were up 1.4% at $30.89 in afternoon deals in New York.