Finnish forestry firm Stora Enso beat first-quarter operating profit forecasts on Thursday, but kept its full-year guidance in a move some analysts described as cautious.
The company's shares fell 2% in morning trade.
Inderes analyst Antti Viljakainen said good numbers were probably to be expected after peer UPM-Kymmene posted strong quarterly earnings earlier in the week.
Stora Enso's quarterly operating earnings before interest and tax (EBIT) jumped 53% year-on-year to €503 million ($528 million), compared with analysts' average forecast of €444 million in a Refinitiv poll.
"We are fully booked, see no weakening in our markets and we continuously work to mitigate higher input costs," chief executive Annika Bresky said in a statement.
The company said it still expected full-year operating EBIT in line with the €1.53 billion booked for 2021.
'Strong Start To The Year'
"Given the strong start to the year, that guidance is arguably conservative", Citi analysts said in a note to clients.
Though the forestry industry has been struggling with a decline in demand for paper, it has seen growing demand for wood-based packaging material. This has led Stora Enso to consider investments in packaging board production worth €900 million - €1 billion.
In March, Stora Enso started the sale process for four of its five paper mills as it no longer sees loss-making paper production as part of its future strategy.
Earlier this week, the company decided to sell its sawmills in Russia to local management, in a move that would result in a €130 million loss.
Bresky said the impact of the Russian operations was not material as they represented only 3% of group sales in 2021.