Wood producer and home builder Weyerhaeuser Co. (WY) reported Friday a narrower loss for the fourth quarter, reflecting a sharp drop in costs and expenses.
Total net sales and revenues for the period declined from the prior year on weak housing market, yet came in above analysts' expectations. Looking ahead to fiscal 2010, the company said markets continue to be challenging, but is confident to deliver significantly improved operating performance. For the fourth quarter, net loss attributable to common shareholders narrowed to $175 million or $0.83 per share from $1.21 billion or $5.73 per share in the previous year.
Fourth-quarter results included an after-tax gain related to Alternative fuel mixture credits of $77 million or $0.36 per share, Real Eestate asset impairments, restructuring and related charges of $67 million or $0.31 per share, Forest Products asset impairments, closures, restructuring and other charges of $57 million or $0.27 per share and a loss on early extinguishment of debt totaling $19 million or $0.09 per share.
Included in the prior-year quarter were impairment of goodwill amounting to $827 million or $3.91 per share, real estate-related charges of $313 million or $1.48 per share, Ownership restructuring of Uruguay assets totaling $149 million or $0.70 per share, closure and restructuring activities charges of $33 million or $0.15 per share and a gain on early extinguishment of debt of $21 million or $0.10 per share. Excluding items, the company reported a net loss of $109 million or $0.52 per share, compared to net loss of $209 million or $0.99 per share in the year-ago quarter. On average, 16 analysts polled by Thomson Reuters expected the company to report a loss of $0.38 per share for the quarter. Analysts' estimates typically exclude special items. For the third quarter, the company reported a break-even, compared with net profit attributable to shareholders of $280 million or $1.33 per share last year.
Total net sales and revenues for the fourth quarter declined to $1.45 billion from $1.78 billion in the same quarter last year. Ten Street analysts estimated revenues of $1.37 billion for the quarter. Weyerhaeuser had reported third-quarter total net sales and revenues of $1.41 billion, down from $2.11 billion in the prior-year quarter. Revenues from Forest Products for the fourth quarter decreased to $1.12 billion from $1.42 billion a year ago. Segment-wise, net sales and revenues from Timberlands declined to $156 million from $224 million in the previous year. Earnings from operations in the segment were lower, mainly due to the company's decision to defer additional harvest, lower sales of non-strategic timberlands and higher logging, trucking and road costs. Wood Products revenues were $510 million, down from $725 million last year. According to the company, higher operating loss for the quarter was due to lower volumes and lower sales prices in nearly all product lines.
Cellulose Fibers generated revenues of $408 million, compared to $413 million in the year earlier. Corporate and Other revenues decreased to $44 million from $61 million in the prior year. For the fourth quarter, Real Estate revenues were $337 million, down from $354 million in the preceding year. The company noted that homebuilding operations closed 778 single-family homes, a 54% increase from third quarter. The average price of homes closed increased 7% percent from the previous quarter and selling expenses increased primarily due to higher volumes. Operating loss narrowed to $178 million from $1.58 billion reported in the preceding year. Total costs and expenses dropped to $1.63 billion from $3.36 billion in the previous year. For the full year, the company posted a net loss attributable to common shareholders of $545 million or $2.58 per share, compared to a net loss of $1.18 billion or $5.57 per share in the prior year. Annual net sales dropped to $5.53 billion from $8.1 billion in the year earlier.
Dan Fulton, president and chief executive officer said, "The weak housing market continues to present challenges and affect our financial performance. 2009 has been another tough year and our financial results are disappointing. Despite difficult market conditions, we made significant progress this past year to position ourselves to rebuild revenues and earnings. We cut costs, reduced production to meet demand, focused on cash generation, and deferred harvest to preserve the long-term values of our timberlands."
Looking ahead to the first quarter, the company expects a lower operating loss in the Wood Products segment, due to improved operating rates and anticipated sales realization improvements for lumber and OSB. In Cellulose Fibers segment, Weyerhaeuser expects earnings from operations for first quarter to be comparable to fourth quarter. Excluding asset impairments, restructuring and related charges, Weyerhaeuser expects Real Estate segment to be profitable in the first quarter. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction and development. Among peers, cardboard box materials maker International Paper Co. (IP) said Wednesday that its fourth-quarter net loss attributable to the company narrowed to $101 million or $0.24 per share from $1.791 billion or $4.25 per share in the prior-year period. Net sales for the quarter declined to $5.977 billion from last year's $6.546 billion. Another rival, Louisiana-Pacific Corp. (LPX) is set to announce its fourth-quarter results on February 10. Analysts expect the company to report a loss of $0.19 per share on revenues of $258.43 million.
WY closed Thursday's regular trading at $40.39 on the NYSE. In the past 52 weeks, the shares have been trading in a range of $18.67 to $46.80.
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