Lumber and wood producer Weyerhaeuser Co. (WY) Friday reported break-even results for the third quarter, compared with a profit last year. The result represents a fragile housing market as the company tries to weather the extended financial turmoil with cost cutting. On an adjusted basis, the company recorded a narrower than expected loss.
The company reported a break-even for the third quarter, compared with net profit attributable to shareholders of $280 million or $1.33 per share last year.
The current-year quarter results included a gain of $98 million or $0.46 per share on sale of 140,000 acres of non-strategic timberlands, $74 million or $0.35 per share of alternative fuel mixture credits, Corporate and Wood Products asset impairments and restructuring charges of $62 million or $0.29 per share, Real Estate asset impairments and restructuring charges of $33 million or $0.16 per share, and income tax adjustments of $21 million or $0.10 per share.
Included in the company's last year quarter results were a gain of $303 million or $1.44 per share on the sale of Containerboard, Packaging & Recycling operations, a gain of $158 million or $0.75 per share on the sale of Australian operations, real estate-related charges of $144 million or $0.69 per share, Wood Products asset impairments of $24 million or $0.11 per share and Restructuring activities related charges of $10 million or $0.05 per share.
Excluding items, the company reported a net loss of $56 million, or $0.26 per share, wider than $3 million, or $0.01 per share, in the third quarter of 2008. On average, 16 analysts polled by Thomson Reuters expected the company to report a loss of $0.45 per share in the quarter. Analysts' estimates typically exclude special items.
For the second quarter, the company's net loss was $106 million or $0.50 per share.
Weyerhaeuser also said that total net sales and revenues declined to $1.41 billion from $2.11 billion in the prior-year quarter. Analysts estimated revenues of $1.42 billion for the quarter. The company had reported net sales and revenues of $1.39 billion for the second quarter.
Commenting on the results, Dan Fulton, president and chief executive officer of the company, stated, "With three of our four business segments linked closely to U.S. housing starts, this recession continues to affect our financial performance."
"Although we saw signs of improvement in the housing sector early in the third quarter, the market remains fragile. In response, we continue cutting costs and improving operations to weather the prolonged downturn and emerge a stronger company when the housing market eventually recovers," Fulton noted.
The company's Forest Products business generated sales of $1.21 billion, down from $1.78 billion in the previous year.
Sales at the company's Real Estate business declined to $196 million from $329 million in the prior-year quarter. Homebuilding operations closed 506 single-family homes in the quarter, a 9% increase from the second quarter. However, the average price of homes closed was down 6% from the previous quarter, primarily due to mix. The number of homes in the backlog increased 10% over the last quarter to 997 units, Weyerhaeuser stated.
Based on business segments, Timberlands posted sales of $193 million, down from $254 million a year ago. Pre-tax earnings rose to $219 million from $107 million last year. Excluding a pre-tax gain of $163 million from the sale of 140,000 acres of non-strategic timberlands in northwestern Oregon, the segment's third quarter results decreased $10 million. According to the company, the earnings from operations were lower primarily due to additional harvest deferrals and lower sales of non-strategic timberlands. These reductions were partially offset by a sale of mineral royalties for approximately $6 million. Losses related to international operations were $4 million in the quarter.
Wood Products' sales were $588 million, compared with $1.01 billion in the prior-year quarter. The segment posted a pre-tax loss of $97 million, compared with a pre-tax loss of $146 million in the prior-year quarter. Performance improved due to higher lumber and oriented strand board sales prices, continued cost control measures and lower log costs. Volumes were down in all product lines except engineered wood products, the company noted.
In addition, Cellulose Fibers generated sales of $390 million, lower than $447 million in the same quarter last year. Pre-tax earnings totaled $166 million in the quarter, up from $78 million a year ago. Lower maintenance costs, improved productivity, and higher average price realizations and volumes for pulp along with lower raw material costs contributed to the improvement.
For the nine-month period, the company's net loss attributable to Weyerhaeuser common shareholders was $370 million or $1.75 per share, compared with a profit of $36 million or $0.17 per share last year. Total net sales and revenues declined to $4.07 billion from $6.32 billion in the prior-year period.
Among peers, cardboard box materials maker International Paper Co. (IP), in its third-quarter preliminary results, reported a profit that more than doubled from last year, helped by an alternative fuel credit. The Memphis, Tennessee-based company's net income attributable to International Paper Co. was $371 million or $0.87 per share, compared to $149 million or $0.35 per share in the prior-year quarter. Quarterly net sales declined to $5.9 billion from the previous year's $6.8 billion.
Another rival, Louisiana-Pacific Corp. (LPX) is set to announce its third-quarter results on November 3. Analysts forecast a loss of $0.19 per share on revenues of $304.09 million.
Going ahead, Weyerhaeuser expects that Timberlands' earnings for the fourth quarter will be lower than the third quarter primarily due to additional harvest deferrals and seasonally higher silviculture costs. No significant non-strategic land sales are anticipated in the fourth quarter.
For Wood products, Weyerhaeuser expects a higher operating loss with seasonally lower volumes and reduced prices in the fourth quarter. Cellulose Fibers' earnings from operations for fourth quarter excluding the effect of alternative fuel mixture credits are expected to be comparable to third quarter. Improved pulp price realizations are expected to be offset by increased annual maintenance and fiber costs.
In addition, Weyerhaeuser expects slightly improved results from homebuilding operations in the fourth quarter due to seasonally increased volumes.
WY is trading at $36.81, down $0.71, on a volume of 1.17 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.