By: (AP) Bowater Inc., a major newsprint maker, says it expects a larger loss in the third quarter than previously anticipated due to more production cuts brought on by a slowdown in newspaper advertising.
Bowater is cutting an additional 40,000 metric tons of production in the third quarter, making its total reduction 120,000 metric tons during the period, the company said in a statement Tuesday.
As a result, Bowater now expects a loss of between 22 cents and 33 cents a share in the third quarter. Analysts surveyed by Thomson Financial/First Call had expected a loss of 19 cents a share.
Bowater's shares fell 28 cents to close at $41.95 in trading Wednesday on the New York Stock Exchange.
"The severe reduction in newspaper advertising has not abated and we expect it to continue for the foreseeable future," Arnold M. Nemirow, the company's chief executive, said in a statement.
"Despite an apparent temporary increase in newspaper circulation and newsprint consumption in the wake of the tragic events of Sept. 11, we anticipate continued weakness in our order book in the fourth quarter," Newirow said.
The company has a total capacity of 3.4 million metric tons annually, Gordon R. Manuel, director of government affairs, said Wednesday. He declined to say what percentage of actual production the cut reflects.
The new estimate does not include the acquisition of Alliance Forest Products Inc., which closed Tuesday. Montreal-based Alliance specializes in timber harvesting, forest management, as well as the production and sale of newsprint.
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