Universal Sales Down

July 23, 2007
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GRAND RAPIDS — Universal Forest Products Inc. has reported second quarter net sales of $773.1 million and net earnings of $16.8 million, down from $826.8 million and $27.3 million, respectively, for the same period in 2006. Diluted earnings per share for the quarter were $0.86, down from $1.41 in the second quarter of 2006. The company said the numbers reflect the continued impact of the weak housing market and soft lumber prices.

Universal president and CEO Michael B. Glenn said the company's site-built construction sales were down nearly 30 percent from the second quarter of last year, and lumber prices were down 15 percent.

"But our gross sales for the quarter are down just 5.8 percent. That gives us confidence in a strategy that's built on four markets and allows us to weather a decline in any one of them," said Glenn.

By market, Universal posted the following gross sales results for the second quarter:

  • $360.9 million in do-it-yourself/retail, an increase of 1.7 percent over 2006;

  • $162.0 million in site-built construction, a decrease of 30 percent from 2006;

  • $162.4 million in industrial, an increase of 7.1 percent over 2006;

  • $105.2 million in manufactured/modular housing, an increase of 3.5 percent over 2006.

Declines in the housing market were broader and deeper than anticipated, Glenn said, making projections for recovery difficult.

"We have reason to believe that recovery will begin in mid- to late 2008," he said. "We have significant order files, but the current inventory of unsold homes makes it unlikely that those will translate to sales any time soon."

Universal is encouraged by its recent move into the concrete form business. It supplies wood forms, or molds, for the construction of concrete structures such as bridges, highways, parking garages and office buildings. "This business uses our existing equipment, facilities and expertise and is a great fit for Universal," Glenn said. "There are no other truly national players in this."

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