10/29/2012 07:48 EDT | Updated 12/29/2012 05:12 EST

West Fraser Timber third-quarter earnings rise as lumber sales climb higher

VANCOUVER - West Fraser Timber Co. Ltd. (TSX:WFT) says its third-quarter earnings after discontinued operations rose 49 per cent to $55 million as lumber prices improved.

The Vancouver-based forestry company said Monday that amounted to $1.27 per diluted share, up from $37 million, or 44 cents per diluted share, in the comparable 2011 quarter.

Sales totalled $772 million, compared to $705 million.

The company said lumber prices reflected gradually improving U.S. demand and continuing steady demand from both Canada and Asia.

"We are encouraged by the signs of a recovery in the U.S. and we feel that we are well positioned to take advantage of the strengthening of the U.S. housing market," said Hank Ketcham, West Fraser's chairman and chief executive officer.

Higher lumber prices also triggered a reduction in duties charged on softwood lumber exported to the U.S. from B.C. and Alberta during the quarter, West Fraser added.

"We expect results from our lumber and panels businesses to improve if U.S. housing construction continues to recover. Despite a continuing positive trend, the current recovery could be adversely affected by U.S. or global economic events," the company said in a statement.

West Fraser also announced that it has entered into an agreement to purchase the Sundance sawmilling and remanufacturing operations in Edson, Alta. and related timber harvesting rights for an undisclosed price.

The deal is expected to close Oct. 31.

West Fraser is an integrated wood products company producing lumber, wood chips, plywood, pulp and newsprint with operations in western Canada and the southern U.S.