Weyerhaeuser Company ( WY ) reported earnings
per share, before special items, of 26 cents in the first quarter
2013, up from earnings of just 2 cents reported in the year-ago
quarter and above the Zacks Consensus Estimate of 22 cents.
Results, however, remained stable sequentially.LOUISIANA PAC (LPX): Free Stock Analysis ReportPOTLATCH CORP (PCH): Free Stock Analysis ReportUNIVL FST PRODS (UFPI): Free Stock Analysis
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Weyerhaeuser reporetd 30.6% year over year increase in its net
sales from continuing operations that settled at $1,951 million and
also surpassed the Zacks Consensus Estimate of $1,879
Considering the segments, Timberland revenue increased 17.2% year
over year to $293 million and accounted for 15.0% of the total
revenue. Revenue from Wood Products was up 55.8% to $988 million
and represented 50.6% of total revenue.
Revenue generated from Cellulose Fibers, roughly 24.3% of total
revenue, decreased 0.2% to $474 million, while Real Estate with
about 10.0% of total revenue, increased 43.1% to $196
Cost of goods sold in the first quarter increased 18.8% year over
year and represented 78.6% of total revenue. Selling, general and
administrative expenses were 8.7% of revenue and increased 12.7%
over the year-ago quarter. Research and development expenses were
about $7 million, flat year over year.
Operating income improved to $256 million versus $101 million in
the first quarter of 2012. Margins in the quarter stood at
Exiting the first quarter 2013, cash and cash equivalents (Forest
Products and Real Estate) of Weyerhaeuser fell 28.8% to $639
million from $898 million in the previous quarter. Long-term debt
was approximately $3,951 million, flat sequentially.
Weyerhaeuser used net cash from operating activities of $61
million in the first quarter 2013 versus $60 million in the
year-ago quarter. Capital expenditure went down 35.2% year over
year to $35 million. Cash dividends paid in the quarter amounted to
$93 million while share repurchase activities were nil in the
Outlook: For the second quarter of 2013, for the
Timberlands segment, management of Weyerhaeuser anticipates that
earnings would be comparable sequentially. Selling prices for
Western logs are expected to improve, offset by higher silviculture
For the Wood Products segment, comparable earnings are expected.
Sales volumes are predicted to improve while lumber and oriented
strand board prices are likely to fall. Raw material costs are
expected to rise.
For the Cellulose Fibers segment, Weyerhaeuser anticipates higher
earnings attributable to lower maintenance and fiber and energy
costs as well as higher pulp price realization.
For the Real Estate segment, Weyerhaeuser anticipates meager
profits from single-family homebuilding operations. Home closings
are expected to increase while selling expenses are likely to
Weyerhaeuser is one of the leading U.S. forest product companies,
primarily engaged in growing and harvesting timber; manufacture,
distribution, and sale of forest products; in addition to real
estate development and construction.
The stock currently carries a Zacks Rank #1 (Strong Buy). Other
stocks to watch out for in the industry are Universal
Forest Products Inc. ( UFPI ),
Louisiana-Pacific Corp. ( LPX ) and
Potlatch Corporation ( PCH ), all bearing a
Zacks Rank #1 (Strong Buy).