) reported impressive third quarter 2012 results with its
earnings per share, before special items, coming in at 22 cents,
way above 12 cents recorded in the year-ago quarter. Results also
surpassed the Zacks Consensus Estimate of 17 cents.
Net sales from continuing operations in the quarter improved
roughly 12.9% year over year to $1,772 million. However, revenue
failed to meet the Zacks Consensus Estimate of $1,785 million and
also recorded sequential decline of 1.2%.
In the third quarter, Timberland revenue increased 6.0% year over
year to $267 million and accounted for 15.1% of the total
revenue. Revenue from Wood Products was up 35.3% to $816 million
and represented 46.0% of total revenue.
Revenue generated from Cellulose Fibers, roughly 25.9% of total
revenue, decreased 8.7% to $459 million, while Real Estate with
about 13.0% of total revenue, increased 9% to $230 million.
Cost of goods sold increased 11.0% year over year and represented
80.4% of total revenue. Selling, general and administrative
expenses were 8.8% of revenue and increased 15.6% over the
year-ago quarter. Research and development expenses were at $8
million compared with $7 million in the year-ago quarter.
Operating income improved to $202 million versus $100 million in
the third quarter of 2011. Margins in the quarter stood at 11.4%.
Exiting the third quarter, Weyerhaeuser's cash and cash
equivalents (Forest Products and Real Estate) fell to $608
million from $861 million in the previous quarter. Long-term debt
was approximately $3,951 million compared with $4,288
million in the previous quarter.
Net cash used by operating activities in the third quarter
increased to $122 million from $117 million in the year-ago
quarter. Capital expenditure jumped 21.0% year over year to $75
million. Cash dividends paid stood at $81 million while share
repurchase activities were nil in the quarter.
For the fourth quarter of 2012, for the Timberlands segment,
management looks forward to improved selling prices for Western
logs and higher fee harvest volumes, which may be offset by
rising silviculture costs.
For the Wood Products segment, weak demands and lower prices are
likely to lead to soft quarter results.
INTL PAPER (IP): Free Stock Analysis Report
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WEYERHAEUSER CO (WY): Free Stock Analysis
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For the Cellulose Fibers segment, management anticipates
comparable sequential results as lower selling pulp prices get
offset by increased sales volume and lower maintenance expenses.
For the Real Estate segment, management anticipates lower
earnings from single-family homebuilding operations. Higher home
closings are expected to get neutralized by higher expenses.
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 competition from
International Paper Co.
We are currently maintaining a Neutral recommendation on