Resolute Forest Products Earnings: Here’s Why Shares are Popping Now

Resolute Forest Products (NYSE:RFP) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0%.

Resolute Forest Products Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 400% to $0.35 in the quarter versus EPS of $0.46 in the year-earlier quarter.

Revenue: Decreased 1.66% to $1.13 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: reported adjusted EPS income of $0.35 per share. By that measure, the company beat the mean analyst estimate of $0.21. It missed the average revenue estimate of $1.16 billion.

Quoting Management: “We significantly improved the Company’s competitiveness by optimizing our asset base, reducing costs wherever possible and strengthening our financial position this year,” said Richard Garneau, president and chief executive officer. “We added pulp assets, committed to growth projects in lumber, invested in power cogeneration plants and further optimized our paper assets, steps that will position us well for the future. At the same time, we returned $67 million to our shareholders in share buybacks, reduced balance sheet working capital by a further $81 million from the end of 2011 and redeemed an additional $85 million of debt.”

Key Stats (on next page)…

Revenue decreased 2.17% from $1.15 billion in the previous quarter. EPS increased 400% from $0.07 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.02 to a profit $0.12. For the current year, the average estimate has moved down from a profit of $0.68 to a profit of $0.62 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)