Forest products company Weyerhaeuser Co. (WY) on Friday posted a sharp decline in its fourth-quarter profit, hurt by higher charges. Adjusted earnings increased and topped Street projections. Net sales also came in above estimates despite a decline.
Fourth-quarter net earnings attributable to common shareholders to $65 million or $0.12 per share from $171 million or $0.32 per share in the previous year.
Latest quarter earnings include net after-tax charges of $12 million for restructuring and asset impairments.
Adjusted net earnings, which excluded certain items, rose to $77 million or $0.14 per share from $52 million or $0.10 per share in 2010. On average, 12 analysts polled by Thomson Reuters expected earnings per share of $0.06 for the quarter. Analysts' estimates typically exclude one-time items.
Total net sales declined to $1.62 billion from $1.66 billion last year, while analysts estimated revenues of $1.59 billion for the quarter. On a continuing operations basis, net sales grew from last year's $1.52 billion.
Segment-wise, sales of Timberlands increased as lower average selling prices for Western logs due to weaker Chinese export demand were offset by increased log sales volumes and slightly higher selling prices in the South.
Wood products sales declined hurt by seasonally lower selling prices and volumes for most products, while cellulose fibers segment's sales grew as the effect of the price decline was mostly offset by increased sales volumes. Real estate segment also posted higher sales helped by home closings that increased 15 percent to 582 single-family homes.
For the full year 2011, Weyerhaeuser reported net earnings of $331 million or $0.61 per share, on net sales from continuing operations of $6.2 billion. This compared to prior year's net earnings of $1.28 billion, including a $1.064 billion income tax benefit, on net sales from continuing operations of $6 billion.
Dan Fulton, president and chief executive officer, stated, ""In 2011 we took full advantage of opportunities to improve our performance in a weaker than expected US housing market. In Timberlands, we used our long term competitive strength in the Asian export markets to capitalize on emerging Chinese demand."
Looking ahead for the first quarter, Weyerhaeuser expects slightly higher earnings from the Timberlands segment excluding earnings from disposition of non-strategic timberlands. Weyerhaeuser also anticipates a smaller adjusted loss from the Wood Products and substantially lower earnings from the Cellulose Fibers segment.
"Through the sale of our hardwoods and Westwood Shipping Lines businesses we sharpened our strategic direction, and we remain focused on improving performance to generate superior sustainable returns for our shareholders in 2012," Fulton.
Weyerhaeuser shares closed Thursday's trading at $20.14, up $0.06 or 0.30 percent.
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