) reported earnings per share, before special items, of 35 cents
in the second quarter 2013, way above just 9 cents earnings
reported in the year-ago quarter. Results also surpassed the
Zacks Consensus Estimate of 30 cents. Sequentially earnings rose
Weyerhaeuser's net sales from continuing operations increased
19.4% year over year to $2,141 million. Result also surpassed the
Zacks Consensus Estimate of $2,028 million.
Considering the segments, Timberland revenue increased 27.1% year
over year to $333 million and accounted for 15.6% of the total
revenue. Revenue from Wood Products was up 37.2% to $1,065
million and represented 49.7% of total revenue.
Revenue generated from Cellulose Fibers, roughly 22.2% of total
revenue, increased 3.7% to $476 million, while Real Estate with
about 12.5% of total revenue, increased 9.8% to $267 million.
Weyerhaeuser reported 9.8% year over year increase in its cost of
sales for the second quarter, which as a percentage of revenue
came in at 77.7%. Selling, general and administrative expenses
were 7.6% of revenue and increased 14.1% over the year-ago
quarter. Research and development expenses were about $8 million,
Operating income improved to $311 million versus $176 million in
the second quarter of 2012. Margins in the quarter stood at
Exiting the second quarter of 2013, cash and cash equivalents
(Forest Products and Real Estate) of Weyerhaeuser improved 42.7%
to $912 million from $639 million in the previous quarter.
Long-term debt remained stable sequentially at $3,951 million.
Weyerhaeuser reported 40.1% year over year increase in its net
cash flow from operating activities that came in at $374 million.
Capital expenditure in the quarter went down 30.9% year over year
to $47 million. Cash dividends paid in the quarter amounted to
$109 million while share repurchase activities were nil in the
For the third quarter of 2013, for the Timberlands segment,
Weyerhaeuser's management anticipates that earnings would decline
sequentially. Higher expected earnings from disposition of
timberlands as well as higher volumes are likely to get offset by
higher silviculture and road expenses, reduction in fee harvest
and weak prices.
For the Wood Products segment, earnings are expected to decline
sequentially. Selling prices are predicted to decline for lumber
and oriented strand board. These will offset improved volume and
For the Cellulose Fibers segment, Weyerhaeuser's management
anticipates comparable earnings in the third quarter. Better
selling prices and volumes and lower fiber and energy costs are
likely to be offset by higher maintenance expenses.
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For the Real Estate segment, Weyerhaeuser's management
anticipates higher profits from single-family homebuilding
operations. Home closings are expected to increase while selling
expenses are likely to escalate.
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 #3 (Hold).
Weyerhaeuser's prime competitor
Universal Forest Products Inc.
) reported an upbeat second quarter 2013 results on Jul 17. The
company registered double-digits revenue growth in all five
market segments while its adjusted earnings per share increased
17.9% year over year to 79 cents. Results were also above the
Zacks Consensus Estimate of 72 cents.
Two other peer companies that are slated to release their
earnings soon are
) on Aug 6, 2013 and
Plum Creek Timber
) on Jul 29, 2013.