) reported earnings per share, before special items, of 27 cents
in the third quarter 2013, above 22 cents earned in the year-ago
quarter. Results also surpassed the Zacks Consensus Estimate of
21 cents. Sequentially earnings fell 22.9%.
Weyerhaeuser's net sales generated in the quarter increased 23.1%
year over year to $2,181 million. Results also surpassed the
Zacks Consensus Estimate of $2,035 million.
Considering the segments, Timberland revenue increased 32.2% year
over year to $353 million and accounted for 16.2% of the total
revenue. Revenue from Wood Products was up 26.2% to $1,030
million and represented 47.2% of total revenue.
Revenue generated from Cellulose Fibers, roughly 21.7% of total
revenue, increased 3.3% to $474 million, while Real Estate with
about 14.9% of total revenue, increased 40.9% to $324 million.
Weyerhaeuser reported 21.3% year over year increase in its cost
of sales for the third quarter, which as a percentage of revenue
came in at 79.2%. Selling, general and administrative expenses
were 7.7% of revenue and increased 7.7% over the year-ago
quarter. Research and development expenses were about $8 million,
flat year over year.
Operating income improved to $277 million versus $202 million in
the third quarter of 2012. Margins in the quarter stood at 12.7%.
Exiting the third quarter of 2013, cash and cash equivalents
(Forest Products and Real Estate) of Weyerhaeuser was down 1% to
$903 from $912 million in the previous quarter. Long-term debt
was at $5,568 million, up 40.9% sequentially.
Weyerhaeuser's cash generation from operating activities more
than doubled and came in at $343 million. Capital expenditure
declined 8% year over year to $69 million. Cash dividends paid in
the quarter amounted to $128 million while share repurchase
activities were nil in the quarter.
For the fourth quarter of 2013, for the Timberlands segment,
Weyerhaeuser's management anticipates comparable earnings
sequentially. Better log prices and higher fee harvest volumes
will drive results in the West while higher volumes will
partially offset higher silviculture expenses. Lower earnings are
anticipated from disposition of timberlands.
For the Wood Products segment, earnings are expected to decline
sequentially due to volume declines and higher loss costs.
For the Cellulose Fibers segment, management of Weyerhaeuser
anticipates higher earnings sequentially. Better pulp sales
realizations, lower chemical costs, and lower maintenance
expenses will drive results.
For the Real Estate segment, management anticipates higher
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 #3 (Hold).
Other stocks to watch out for in the industry are
Universal Forest Products Inc.
) with a Zacks Rank #1 (Strong Buy) while
Boise Cascade Company
), each come with a Zacks Rank #2 (Buy).
BOISE CASCADE (BCC): Free Stock Analysis
RAYONIER INC (RYN): Free Stock Analysis
UNIVL FST PRODS (UFPI): Free Stock Analysis
WEYERHAEUSER CO (WY): Free Stock Analysis
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