) reported its financial results for the second quarter 2012 on
July 27. Earnings per share were 9 cents and excluded 7 cents (or
$37 million) after-tax gains from special items. Results surpassed
the year-ago earnings of 6 cents but failed marginally to meet the
Zacks Consensus Estimate of 10 cents.
Net sales from continuing operations in the quarter improved
roughly 11.4% year over year to $1,793 million and also surpassed
the Zacks Consensus Estimate of $1,758 million.
In the second quarter, Timberland revenue decreased 9.0% year
over year to $262 million and accounted for 14.6% of the total
revenue. Revenue from Wood Products was up 28.3% to $776 million
and represented 43.3% of total revenue.
Revenue generated from Cellulose Fibers, roughly 25.6% of total
revenue, decreased 12.7% to $459 million, while Real Estate with
about 16.5% of total revenue, increased 55% to $296 million.
Cost of goods sold increased 12.9% year over year and
represented 84.6% of total revenue. Selling, general and
administrative expenses were 7.9% of revenue and down 2.1% over the
year-ago quarter. Research and development expenses were at $8
million as compared with $7 million in the year-ago quarter.
Operating income improved to $176 million versus $127 million in
the second quarter of 2011. Margins in the quarter stood at
Exiting the second quarter, Weyerhaeuser had cash and cash
equivalents (Forest Products and Real Estate) of approximately $861
million versus $728 million in the previous quarter. Long-term debt
was approximately $4,288 million down from $4,309 million in the
Net cash used by operating activities in the second quarter
increased to $267 million from $114 million in the year-ago
quarter. Capital expenditure jumped 74.4% year over year to $68
million. Cash dividends paid stood at $80 million while share
repurchase activities were nil in the quarter.
For the third quarter of 2012, management anticipates gains from
sale of non-strategic timberland to be partially offset by lower
domestic selling prices for western logs and lower price
realizations for Southern logs.
For the Wood Products segment, earnings results are expected to
be weak during the quarter characterized by comparable sales and
lower lumber selling prices.
For the Cellulose Fibers segment, management anticipates lower
selling pulp prices to be offset by improved productivity, lower
annual maintenance expense, and reduced chemical, energy and fiber
For the Real Estate segment, management anticipates higher
earnings from single-family homebuilding operations. Higher home
closings are expected to get offset by lower prices and higher
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; besides
real estate development and construction.The company faces
International Paper Co.
We are currently maintaining a Neutral recommendation on
INTL PAPER (IP): Free Stock Analysis Report
LOUISIANA PAC (LPX): Free Stock Analysis Report
WEYERHAEUSER CO (WY): Free Stock Analysis
To read this article on Zacks.com click here.