NASDAQ$MERC

Mercer International Inc · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Mercer International Inc. reported record operating EBITDA and increased net income due to higher pulp and lumber sales realizations.

Mercer International Inc. reported a strong third quarter with record Operating EBITDA of $148.1 million and net income of $69.1 million, driven by higher pulp and lumber sales realizations. The company also started up its recently acquired cross-laminated timber facility in Spokane, Washington.

  • Operating EBITDA increased to a record $148.1 million.
  • Net income was $69.1 million (or $1.05 per basic share and $1.04 per diluted share).
  • Started up recently acquired cross-laminated timber facility in Spokane, Washington.
  • Pulp results were significantly improved over the second quarter due to less planned maintenance downtime and higher sales volumes.

Headline financials

Total Revenue

$470M

Previous: $333M+41.0%
EPS (adj)

$1.04

Previous: $0.11+845.5%
Avg Lumber Sales Realizations

$692.00

No prior period
Capital Expenditures

-$38.3M

Previous: -$14.6M-161.7%
Free Cash Flow

$30.8M

Previous: -$7.09M+534.3%
Net Income

$69.1M

Previous: $7.55M+816.1%
Operating Income

$114M

Previous: $13.7M+728.2%
Gross Profit

-$337M

Previous: -$304M-10.7%
Cash & Equivalents

$339M

Previous: $346M-2.0%
Total Assets

$2.23B

Previous: $2.04B+9.1%
Stock-Based Comp

$1.01M

Previous: $895K+12.3%

Revenue & EPS history

Mercer · Revenue · Quarterly

$470M

Q3 2021+41%vs Q3 2020
Beat estimate in 8 of 16 quarters(50%)
ActualEstimate

Revenue by segment

Mercer · $399M total across 2 segments · Q3 2021

  • Pulp Segment
    $397M+44.3%
  • Corporate and Other
    $2.28M+92.9%

Forward guidance

Looking ahead to the fourth quarter, the company expects steady NBSK pulp demand in Europe but a weakening market in China. For hardwood pulp, they expect negative pricing pressure. In the solid wood segment, they expect lumber demand to remain steady with modest price improvements in the U.S. and downward price pressure in Europe.

Tailwinds

  • Generally steady NBSK pulp demand in Europe.
  • Lumber demand to remain steady in all markets.
  • Continued modest price improvements in the U.S. market for lumber.
  • Logistics issues are expected to be resolved over the coming months.
  • Capital projects are designed to deliver high returns and help achieve ESG objectives.

Headwinds

  • Weakening market in China for NBSK pulp.
  • Negative pricing pressure for hardwood pulp due to incremental supply.
  • Downward price pressure in the European market for lumber.
  • Expected increase in fiber prices in Canada due to reduced wood harvesting.
  • Expected increase in fiber costs for pulp mills in Germany due to lower wood chip availability.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2021

Historical avgQ3 2021

+0.3%

Avg return

Earnings day

-1.2%

Avg return

5 days after

-1.7%

Avg return

30 days after

44%

28 / 64 earnings

Positive

+24.5%

Q4 2015

Best reaction

-15.5%

Q1 2010

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.6%-26.9%-24.3%
Q3 2025-6.9%-6.3%-11.7%
Q1 2025-7.3%-20.0%-15.0%
Q4 2024+16.9%+22.8%-1.1%
Q3 2024-0.2%-2.3%-4.3%
Q2 2024+6.6%+0.8%-12.6%
Q1 2024-2.4%-3.3%-17.2%
Q4 2023+9.1%+7.7%+20.4%
Q3 2023+22.4%+19.3%+23.4%
Q2 2023+7.1%-4.9%+7.1%
Q1 2023-5.1%-3.6%-6.7%
Q4 2022-2.4%-5.6%-17.8%
Q3 2022-4.7%-11.6%-3.4%
Q2 2022+0.0%-5.4%+1.8%
Q1 2022+1.4%+3.5%-5.4%
Q4 2021+1.4%+4.6%+11.0%
Q3 2021+2.2%+0.3%+5.7%
Q2 2021-0.3%+0.9%+0.4%
Q1 2021-3.8%-5.8%-13.4%
Q4 2020-4.8%-2.2%+5.9%
Q3 2020+6.8%+16.5%+39.9%
Q2 2020-6.9%-10.5%+6.0%
Q1 2020-2.9%-13.9%-16.1%
Q4 2019-5.5%-4.5%-30.8%
Q3 2019+3.4%+6.9%+1.9%
Q2 2019-5.4%-10.6%-7.6%
Q1 2019+23.8%+23.8%+2.0%
Q4 2018-2.3%-3.7%-9.4%
Q3 2018-8.0%-13.0%-30.8%
Q2 2018+2.1%+7.2%+5.7%
Q1 2018+1.5%+7.1%+20.6%
Q4 2017+1.5%-2.3%-0.8%
Q3 2017-2.4%+2.8%+0.0%
Q2 2017-7.0%-9.0%-9.0%
Q1 2017-2.0%-5.2%-7.6%
Q4 2016+0.4%+4.2%+2.1%
Q3 2016+1.9%+1.3%+23.2%
Q2 2016-3.2%-2.7%+2.9%
Q1 2016-12.8%
Q4 2015+24.5%
Q3 2015+1.7%
Q2 2015-0.9%
Q1 2015-2.4%
Q4 2014+0.9%
Q3 2014+11.4%
Q2 2014+0.3%
Q1 2014+8.3%
Q4 2013+0.6%
Q3 2013+5.6%
Q2 2013+0.0%
Q1 2013+0.5%
Q4 2012-0.7%
Q3 2012-0.1%
Q2 2012+7.2%
Q1 2011-0.1%
Q1 2012+0.6%
Q4 2009-0.3%
Q4 2011-0.3%
Q3 2011-5.7%
Q3 2010-5.7%
Q2 2010-9.1%
Q2 2011-9.1%
Q4 2010-9.1%
Q1 2010-15.5%

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