Domtar’s earnings drop

Shares of Montreal-based pulp and business papers producer Domtar Corp. slumped $6.25 or 6.62 per cent to $88.09 in Toronto Thursday after the company posted a sharp drop in first-quarter earnings. Revenue held up well at $1.39 billion, compared to $1.42 billion a year earlier, but lower pulp prices, higher fuel and materials costs and special charges brought earnings to $28 million or 76 cents a share, down from $133 million or $3.14 a share a year earlier.

Excluding the special onetime items, adjusted earn- ings were $61 million or $1.65 a share, compared with $138 million or $3.25 a share.

Domtar is the leading North American producer of business and copying papers and also makes papergrade, fluff and specialty pulps, with ten pulp and paper mills in the U.S. and Canada.

It recently entered the tissue personal care market with a $264-million acquisition. CEO John Williams said pulp prices have recently increased and Domtar continues to generate strong free cash flow. It will go on returning capital to shareholders and make strategic acquisitions to offset the long-term decline in paper demand.