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CLW part II



February 17, 2011 – Comments (0) | RELATED TICKERS: CLW , MERC , RKT.DL

CLW was my best pick in the Pulp sector, it started out its run at $10/shr just like MERC is now doing with its dramatically increased EPS estimates of 100% or more. 30 days ago MERC had forward eps estimates of only .97 eps, today they are more than double that at $2.25 eps. This is exactly what happened in the turnaround at CLW and it never looked back.

Easy Double if not more in 2011.

My Target $27.50

* Q4 diluted EPS 63 euro cents vs est 47 euro cents

* Q4 pulp rev up 50 pct at 232.2 mln euro

* Q4 energy rev up 31 pct at 13.4 mln euro

* Operating EBITDA up 3-fold at 64.6 mln euro

Feb 14 (Reuters) - Canada's Mercer International Inc posted a 13-fold surge in quarterly profit, topping market estimates, helped by higher pulp prices, sending its U.S.-listed shares up 5 percent in extended trade.

Mercer, which produces market northern bleached softwood kraft (NBSK), the paper industry's benchmark for pulp, expects pricing and demand to sustain in the near term.

In the short term, pulp prices have risen by about $20 per ADMT (air dried metric ton) in China this month, and producers have announced an increase of $30 per ADMT in selected markets to take effect in March, president Jimmy Lee said in a statement.

At the end of 2010, prices in Europe were about $950 per ADMT and in North America and China, were about $960 and $840 per ADMT, respectively, Lee said.

"Additionally...NBSK producer inventories are around 25 days which generally signals strong demand," he added.

Fourth-quarter earnings came in at 35.3 million euro ($48 million), or 63 euro cents a share, up from 2.7 million euro, or 6 euro cents a share, a year ago.

Analysts on average expected earnings of 47 euro cents a share, according to Thomson Reuters I/B/E/S.

Pulp revenue rose about 50 percent to 232.2 million euro, while revenue from the sale of excess energy rose about 31 percent to 13.4 million euro, helped by production at the company's Celgar green energy project.

Mercer's Nasdaq-listed shares were up about 5 percent at $12.49 in extended trade on Monday. They ended at C$11.94 on the Toronto Stock Exchange. ($1 = 0.736 Euros) (Reporting by Gowri Jayakumar; Editing by Vyas Mohan) 



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