MAXXAM Reports Results for First Quarter 1998
HOUSTON--(BUSINESS WIRE)--April 22, 1998--MAXXAM Inc. (ASE:MXM) today reported net income of $1.9 million, or $0.25 per share, for the first quarter of 1998, compared to net income of $0.7 million, or $0.07 per share, for the first quarter of 1997.
Net sales for the first quarter of 1998 were $664.0 million, compared to $631.6 million for the year-ago period. Operating income was $51.3 million for the first quarter of 1998, compared to $49.0 million for the first quarter of 1997.
MAXXAM operates primarily in three areas: aluminum, forest products, and real estate.
Aluminum Operations
The company's aluminum operations reported operating income of $46.3 million for the first quarter of 1998, compared to operating income of $32.8 million for the same period of 1997. Net sales were $597.0 million in the first quarter of 1998, compared to $547.4 million for the same period of 1997.
Operating income in the first quarter of 1998 was up significantly from the year-ago quarter, despite lower realized prices for primary aluminum, due largely to operating improvements and reduced overhead expenses. Also contributing to the improvement were increased shipments of fabricated aluminum products.
(NOTE: A separate press release, with additional details on aluminum operations, is being released today by Kaiser Aluminum Corporation.)
Forest Products Operations
Operating income for forest products operations was $10.1 million for the first quarter of 1998, compared to $18.8 million for the same period a year ago. Operating cash flow (operating income plus depreciation and depletion) was $15.7 million for the first quarter of 1998, compared to $25.4 million for the same period of 1997. Net sales amounted to $51.9 million for the first quarter of 1998, compared to $66.8 million for the first quarter of 1997.
The decrease in net sales was due primarily to lower shipments of lumber, logs, and chips and to lower average realized prices for common grade Douglas-fir lumber. This impact was partially offset by higher average realized prices for upper and common grade redwood lumber. The decrease in volumes was due largely to well-above-normal rainfall during the 1998 period which reduced demand, hindered logging operations, slowed production, and inhibited shipments. Operating income for the quarter reflected the decline in net sales.
Real Estate/Other Operations
Real estate/other operations reported an operating loss of $1.6 million for the first quarter of 1998, compared to operating income of $0.4 million for the same period of 1997. Net sales from MAXXAM's real estate/other operations were $15.1 million for the first quarter of 1998, compared to $17.4 million for the same period of 1997.
Net sales declined primarily as a result of lower revenues from real estate development and commercial operations, reflecting various asset dispositions during the first quarter of 1997 and a 1997 bulk land sale at the Fountain Hills, Ariz., development. |
