Forest products company Weyerhaeuser Co. (WY: Quote) reported Friday that its second-quarter profit more-than doubled from last year, fueled by strong growth in net sales as all divisions, except real estate, performed well. Earnings and sales also topped analysts' consensus estimates. Looking ahead to the third quarter, the company sees lower earnings from Timberlands and Wood Products segments.
President and Chief Executive Officer Dan Fulton said, "This was a milestone quarter for Weyerhaeuser. We moved forward both strategically and operationally with the acquisition of Longview Timber LLC and by delivering strong operating results in this improving housing market."
For the second quarter, net earnings to common shareholders climbed to $196 million or $0.35 per share from $84 million or $0.16 per share in the same quarter last year. Excluding prior year's special items, net earnings increased fourfold from the previous year.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly net sales grew 20 percent to $2.14 billion, highest since 2008, from $1.79 billion last year, Eleven analysts were looking for revenue of $2.04 billion for the quarter.
Total net sales increased in the timberlands segment. The company noted that in the West, improved selling prices for export and domestic logs were mostly offset by slightly lower fee harvest volumes, increased logging costs, and seasonally higher road and silviculture expenses.
On July 23, 2013, Weyerhaeuser completed the acquisition of Longview Timber LLC. Earnings from these operations will be included in the Timberlands segment beginning in the third quarter of 2013.
In the quarter, lumber sales volumes improved 13 percent sequentially, and sales volumes for most other products improved slightly. These improvements were more than offset by lower average selling prices for oriented strand board and higher raw material costs.
The company said its home closings increased seasonally to 636 single-family homes, and average margins on homes closed improved due to mix, partly offset by increased selling costs due to the higher closing volume.
At the end of the second quarter, the backlog of homes sold, but not closed, totaled 1,438 units, compared with 1,033 units one year ago.
Looking ahead to the third quarter, Weyerhaeuser anticipates lower earnings from the Timberlands segment, as the positive contribution from a partial quarter of Longview Timber earnings will not offset a normal seasonal decline in the contribution from the existing operations.
The company also anticipates lower earnings from the Wood Products segment, comparable earnings from the Cellulose Fibers segment, and slightly higher earnings from single-family homebuilding in the third quarter.
Single-family closing volume should increase seasonally to more than 700 single-family homes, the company noted.
Weyerhaeuser shares closed Thursday's trading at $29.14, up $0.28 or 0.97 percent. In pre-market activity, shares declined $0.26 or 0.89 percent, an currently trading at $28.88.
by RTT Staff Writer
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