Weyerhaeuser reported $0.27 earnings per share in the
fourth-quarter 2013, up $0.01 year over year and in line with the
Zacks Consensus Estimate. Revenue rose by 12.8% as all business
segments posted improved results. Gross margin suffered a bit due
to rise in cost of sales. For the first quarter of 2014, export
demand is likely to remain high in the Timberlands segment, while
higher lumber volumes and prices will drive earnings in the Wood
products segment. Earnings in the Cellulose Fibers segment will
decline due to decline in pulp sales volume and higher expenses.
Spin-off or split-off of WRECO to TRI Pointe Homes will favor
Weyerhaeuser as the transaction will be tax-free for the company.
Also, the company targets to achieve a dividend payout of up to 75%
of funds available for distribution in the long run. However, stiff
competition, adverse currency translation and geopolitical issues
cannot be completely ignored. Considering all these, we maintain
our Neutral recommendation.
Based in Washington, Weyerhaeuser Company (WY) is one of the
leading U.S. forest product companies with operations primarily
concentrated in Southern California, Nevada, Washington, Texas,
Maryland, and Virginia. Weyerhaeuser caters to a diverse clientele
spread over the U.S., Canada, Japan, Europe, and other regions. The
company grows and harvests trees, builds homes and manufactures
forest products worldwide, primarily to be used as lumber, pulp and
paper, and other wood and building products it offers logs,
hardwood lumber, timber, poles and plywood, as well as minerals,
oil, gas, seeds and seedlings. The company operates its businesses
through the segments listed below:
The Wood Products segment produces softwood lumber, plywood and
veneer, oriented strand board (OSB), composite and other panels,
and other products.
The Cellulose Fibers segment produces pulp, a range of both
coated and uncoated papers and bleached board used in the
production of liquid containers. The company operates 6 mills and 2
The Timberlands segment owns and manages roughly 7.0 million
acres of timberland in North America, post the acquisition of
Longview Timber LLC.
The company has decided to either spin-off or split-off its Real
Estate segment to Tri Ponte. The segment includes Weyerhaeuser's
real estate development and construction businesses carried out by
Weyerhaeuser Real Estate Company (WRECO), a wholly owned subsidiary
of the company.
Weyerhaeuser Co (WY): Read the Full Research
WEYERHAEUSER CO (WY): Free Stock Analysis
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