Company Reports

Canfor Corporation reported second-quarter sales of CAD 1.53 billion, up 10.7% year over year. Gross margin improved 640 basis points to 25.2% while adjusted diluted earnings per share improved to a loss of CAD 0.05, up from a CAD 0.56 loss a year ago.

Canfor is one of the largest softwood lumber producers globally, with over 6 billion board feet of production capacity in western Canada, the Southeastern US, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor also sells significant volume in Europe and Asia, with both accounting for roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of various housing markets and overall economic conditions.

Canfor's first-quarter adjusted loss per share of CAD 0.59 improved from the fourth-quarter's CAD 1.22 loss but nearly doubled from the year-ago loss of CAD 0.32. Lumber demand remains soft, and higher oil prices caused by the Iran war will not help housing construction demand.

Canfor is one of the largest softwood lumber producers globally, with over 6 billion board feet of production capacity in western Canada, the Southeastern US, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor also sells significant volume in Europe and Asia, with both accounting for roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

Canfor is one of the largest softwood lumber producers globally, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor also sells significant volume in Europe and Asia, with both accounting for roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

Canfor reported a fourth-quarter 2025 adjusted operating loss of CAD 145 million versus a CAD 82 million loss in the prior-year quarter. A new 10% tariff by the US, lower North American demand, and downtime for normal seasonal maintenance drove the loss.

Canfor announced late on Dec. 3 that it has agreed to buy the 45.2% of Canfor Pulp Products that it does not already own. The deal should close in the first quarter of 2026. Pulp shareholders will choose to receive either CAD 0.50 per share or 0.0425 Canfor shares per Pulp share.

Canfor's third-quarter 2025 adjusted EPS was a CAD 1.47 loss with the company reporting weakness across its global markets. Softening pricing from excess industry capacity, tepid demand, and trade dispute uncertainty also hurt earnings. Canfor Pulp Products warned of a debt covenant violation.

Canfor is one of the largest softwood lumber producers globally, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

Canfor is one of the largest softwood lumber producers in the world, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

Canfor's second-quarter net sales were roughly flat with a year ago. However, the company reported a CAD 251 million operating loss, driven by weak lumber market conditions in the US that led to asset write-downs and impairment charges in the quarter.

Canfor is one of the largest softwood lumber producers in the world, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

No-moat-rated Canfor reported first-quarter results that were largely in line with our expectations. Net sales rose 2.5% year over year as gains in the lumber segment were offset by lower sales in the pulp and paper segment. Canfor reported a CAD 28.5 million loss in the quarter, an improvement from the CAD 85.8 million loss in the first quarter a year ago. Canfor’s lumber business benefited from higher prices and reported a CAD 26 million loss in the quarter, which was also an increase from a year ago. That said, heightened economic uncertainty has raised concerns of a slowdown in building, which will likely loom over the lumber industry for the remainder of the year. While Canfor has reduced its exposure to Canada and potential tariffs in recent years, lumber markets rely on new residential construction and DIY projects that we expect will remain constrained for much of the year. As such, we have maintained our CAD 20 fair value estimate.

Canfor is one of the largest softwood lumber producers in the world, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

No-moat-rated Canfor reported fourth-quarter results that were largely in line with our expectations as the company continues to navigate a challenging lumber market while struggles in the pulp and paper business persisted. Canfor’s net sales were roughly flat as gains in lumber were offset by pulp and paper, and the company reported an operating loss of CAD 46 million, driven by losses in both segments. That said, this was an improvement from the CAD 191 million loss a year ago as lumber pricing offered some relief. Additionally, Canfor is now navigating the threat of tariffs on its Canadian lumber products that were recently delayed again until early April. Roughly 20% of Canfor’s sales are exposed to Canadian duties and tariffs. While it’s unclear if the 25% additional tariff will resume and how long it will last if it does, prolonged tariffs could have a material impact on lumber producers with significant exposure to the region. As such, we have maintained our CAD 20 fair value estimate.

Canfor is one of the largest softwood lumber producers in the world, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

On March 4, the US implemented tariffs on Canadian lumber and wood products of 25%. This 25% tariff is in addition to the current 14.54% countervailing duty on lumber imports from Canada, bringing the total to almost 40%. For years the US has accused Canada of producing artificially low-priced lumber because timberland in Canada is largely owned by the government and it sets the stumpage fees. The US has argued that Canadian lumber producers benefit from artificially low timber prices while US producers pay market price for timber. The most recent policy for countervailing duties on Canadian lumber was set by the US in 2019 and revised to 14.52% in August 2024, with revised duties set for August 2025, where many expect a significant hike. It’s not clear yet if the new tariffs will last a few days, weeks, months, or longer, but prolonged tariffs and the expected increase in countervailing duties later this year could drive significant increases in lumber prices. While tariffs could have an adverse effect on lumber producers, we are leaving our fair value estimates in place.

No-moat-rated Canfor continued to navigate challenging lumber and pulp markets in the third quarter. Net sales fell 8% year over year while the company reported a CAD 560 million operating loss, largely due to impairments taken in the quarter in both the lumber and pulp businesses. Net of adjustments and one-time items, Canfor reported a CAD 139 million loss. Unfavorable market conditions continue to weigh heavily on Canfor’s businesses. During the quarter, Canfor navigated lower lumber prices, soft demand, and ample supply while pulp end markets suffered from weak demand in China. To address these challenges, Canfor announced mill closures in its lumber and pulp and paper businesses during the quarter, mainly to reduce its exposure to British Columbia. While we expect lumber prices will recover next year due to the removal of industry capacity in 2024, Canfor’s exposure to British Columbia and capacity curtailments could weigh on shipments. As such, we have maintained our CAD 20 fair value estimate.

Canfor is one of the largest softwood lumber producers in the world, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

No-moat-rated Canfor reported lackluster second-quarter earnings as the company continued to navigate challenging lumber markets. Net sales fell 4.5% year over year while the company reported a CAD 250 million operating loss, largely due to weakness in its lumber business. The higher-for-longer interest rate environment continues to weigh on Canfor and its competitors as housing markets remain largely stagnant. As such, we've decreased our fair value estimate to CAD 20 per share from CAD 23 due to our expectation for softer near-term lumber demand.