Plant closure costs hurt G-P profits

ATLANTA – Wood-products giant Georgia-Pacific Corp. blamed a weak economy, higher energy costs and severe winter weather for a $28 million first-quarter loss.

The loss for the three months ending March 31 was equivalent to 11 cents a share, compared to a loss of $484 million, or $2.10 a share, for the same period a year ago, the company reported Thursday.

Excluding one-time items – mainly a charge related to the closure of a tissue manufacturing plant in Old Town, Maine – Georgia-Pacific said it lost $9 million in the quarter, or 4 cents a share. That’s equal to what analysts surveyed by Thomson First Call predicted.

Revenue in the quarter was $4.6 billion, a sharp drop from the $5.8 billion it made a year ago.

“The first quarter provided extremely difficult circumstances, but we are beginning to see signs of strengthening in the business fundamentals,” said chief executive A.D. “Pete” Correll.

Earlier this month, Atlanta-based Georgia-Pacific announced it will retire its two tissue-manufacturing machines at its Maine mill, putting about 300 employees out of work.

The company is one of the world’s leading manufacturers of tissue, packaging, paper, building products, pulp and related chemicals. It has 61,000 employees.

Georgia-Pacific has suffered in recent quarters from asbestos liability costs. Its building products division used to make gypsum board products, which contain asbestos. About 300,000 asbestos-related claims have been filed against the company to date.

The company said its first-quarter liability costs were in line with projections, though the number of new claims filed in the quarter was about 10 percent higher than anticipated.