New York, Oct 17. (Reuters). Forest products companies Georgia-Pacific Corp. and Boise Cascade Corp. on Thursday reported shaky quarterly results and warned that a weak economy would chip away at profits in the months ahead. Georgia-Pacific, the maker of Brawny paper towels and Dixie paper cups, managed to reverse a year-ago loss and post a profit for the third quarter as it cut costs and curtailed excess production. But the turnaround was overshadowed by sobering comments that sent the company's shares down more than 8 percent in early trading. Boise Cascade, meanwhile, posted lower third-quarter results hurt by low prices on newsprint and building products. The company, based in Boise, Idaho, had earnings after one-time items of $8.5 million, or 9 cents a share, compared with $15 million, or 20 cents a share, a year ago. Tepid demand and pricing on building products affected the results of both companies, with both saying they expect customer demand to weaken going forward in the sluggish economy. "Anyone who has got solid-wood operations will continue to drag," said CIBC World Markets analyst Don Roberts. "And it can only get worse on the demand side when housing starts to turn over eventually." Among Georgia-Pacific's troubles: profits, excluding special items, across three its major businesses fell from last year; results in the coming quarters look likely to be hurt by the economic slowdown; and, perhaps most concerning to investors, costs associated with asbestos liabilities are up. Georgia-Pacific, based in Atlanta, estimates costs for its asbestos liabilities this year are running $51 million higher than it had forecast. That means it may need to dip into its reserves at a faster clip than it had hoped. "That is going to unsettle people," CIBC's Roberts said. "You will never get rid of the asbestos claims." The company posted a profit, including special items, of $66 million, or 27 cents per share, compared with a loss of $182 million, or 80 cents per share, a year earlier. Sales slipped about 1.6 percent to $6.2 billion. The earnings report, with its warning about asbestos liability, was the latest in a string of worrisome announcements from the company, whose shares are down more than 50 percent this year. Just last month, Georgia-Pacific delayed the separation of its consumer products and packaging divisions, citing weakness in financial markets and its building products unit. The company also faces stiff competition from heavyweights Procter & Gamble Co. and Kimberly-Clark Corp. in its consumer products business and has stepped up advertising and promotions to keep pace. But those promotional costs have also taken a toll, undercutting results in its tissue unit. Georgia-Pacific's shares tumbled $1.08 to $12.05 on the New York Stock Exchange. Boise Cascade's shares were up $1.59, or more than 7 percent, at $24.07 on the New York Stock Exchange.