Business News
WEYERHAEUSER REPORTS 3RD QUARTER RESULTS
Monday 02. November 2009 - Weyerhaeuser Company (NYSE: WY) today reported break?even results for third quarter 2009 on net sales from continuing operations of $1.4 billion.
This compares with net earnings of $280 million, or $1.33 per share, on net sales from continuing operations of $2.1 billion for the same period last year.
SIGNIFICANT THIRD QUARTER 2009 AFTER-TAX ITEMS
After-Tax Gain
(Charge)
($ millions)
Gain (Charge)
per share
(dollars)
Gain on sale of 140,000 acres of non-strategic timberlands
$98
$0.46
Alternative fuel mixture credits
$74
$0.35
Corporate and Wood Products asset impairments and restructuring charges
($62)
($0.29)
Real Estate asset impairments and restructuring charges
($33)
($0.16)
Income tax adjustments
($21)
($0.10)
Excluding these items, the company reported a net loss of $56 million, or $0.26 per share, in the third quarter of 2009.
SIGNIFICANT THIRD QUARTER 2008 AFTER-TAX ITEMS
After-Tax Gain
(Charge)
($ millions)
Gain (Charge)
per share
(dollars)
Sale of Containerboard, Packaging & Recycling operations
$303
$1.44
Sale of Australian operations
$158
$0.75
Real estate-related charges
($144)
($0.69)
Wood Products asset impairments
($24)
($0.11)
Restructuring activities
($10)
($0.05)
Excluding these items, the company reported a net loss of $3 million, or $0.01 per share, in the third quarter of 2008.
“With three of our four business segments linked closely to U.S. housing starts, this recession continues to affect our financial performance,” said Dan Fulton, president and chief executive officer. “Although we saw signs of improvement in the housing sector early in the third quarter, the market remains fragile. In response, we continue cutting costs and improving operations to weather the prolonged downturn and emerge a stronger company when the housing market eventually recovers.”
SUMMARY OF THIRD QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data)
3Q 2009
3Q 2008
Change
Net earnings
$
$280
($280)
Earnings per share
$
$1.33
($1.33)
Net sales from continuing operations
$1,407
$2,107
($700)
SEGMENT RESULTS FOR THIRD QUARTER
Contributions (Charges) to Pre-Tax Earnings
Millions
3Q 2009
3Q 2008
Change
Timberlands
$219
$107
$112
Wood Products
($97)
($146)
$49
Cellulose Fibers
$166
$78
$88
Real Estate
($64)
($316)
$252
TIMBERLANDS
3Q 2009
2Q 2009
Change
Contribution to pre-tax earnings (millions)
$219
$66
$153
3Q 2009 Performance – Excluding a pre-tax gain of $163 million from the sale of 140,000 acres of non-strategic timberlands in northwestern Oregon, the segments third quarter results decreased $10 million.
Third quarter earnings from operations were lower primarily due to additional harvest deferrals and lower sales of non-strategic timberlands other than the transaction mentioned above. These reductions were partially offset by a sale of mineral royalties for approximately $6 million. Losses related to international operations were $4 million, compared to $7 million in second quarter.
4Q 2009 Outlook -Weyerhaeuser expects earnings to be lower than third quarter primarily due to additional harvest deferrals and seasonally higher silviculture costs. No significant non-strategic land sales are anticipated in the fourth quarter.
WOOD PRODUCTS
3Q 2009
2Q 2009
Change
Charge to pre-tax earnings (millions)
($97)
($162)
$65
3Q 2009 Performance – Excluding the pre-tax items noted below, the segments third quarter loss decreased $55 million.
Third quarter 2009 included charges of $5 million for closures, restructuring and asset impairments.
Second quarter 2009 included charges of $15 million primarily for closures, restructuring and asset impairments.
Performance improved due to higher lumber and oriented strand board sales prices, continued cost control measures and lower log costs. Volumes were down in all product lines except engineered wood products.
4Q 2009 Outlook – Weyerhaeuser expects a higher operating loss with seasonally lower volumes and reduced prices.
CELLULOSE FIBERS
3Q 2009
2Q 2009
Change
Contribution to pre-tax earnings (millions)
$166
$100
$66
3Q 2009 Performance – Third quarter 2009 included a pre-tax gain of $122 million related to alternative fuel mixture credits, compared to $107 million in the second quarter. Excluding the credit, the segments earnings improved $51 million in the third quarter.
Fewer annual maintenance outages and completion of the boiler repair at Columbus, Mississippi early in the third quarter resulted in lower maintenance costs and improved productivity. Higher average price realizations and volumes for pulp along with lower raw material costs contributed to the improvement.
4Q 2009 Outlook -Excluding the effect of alternative fuel mixture credits, Weyerhaeuser expects earnings from operations for fourth quarter to be comparable to third quarter. Improved pulp price realizations are expected to be offset by increased annual maintenance and fiber costs.
REAL ESTATE
3Q 2009
2Q 2009
Change
Charge to pre-tax earnings (millions)
($64)
($50)
($14)
3Q 2009 Performance – Excluding the pre-tax items noted below, the segments third quarter loss decreased $5 million.
Asset impairments, restructuring and investment-related charges were $55 million in the third quarter compared to $52 million in the second quarter.
Second quarter included a gain of $9 million from the sale of partnership interests and $7 million from the sale of land and lots.
Homebuilding operations closed 506 single-family homes, a 9 percent increase from second quarter. However, the average price of homes closed was down 6 percent from the previous quarter, primarily due to mix. The number of homes in the backlog increased 10 percent over the last quarter to 997 units.
4Q 2009 Outlook – Weyerhaeuser expects slightly improved results from homebuilding operations in the fourth quarter due to seasonally increased volumes.
CORPORATE AND OTHER
Third quarter results for the Corporate and Other segment include the following pre-tax items:
Corporate restructuring charges include a $60 million noncash pension charge triggered by the amount of distributions paid during 2009 to former salaried employees.
The company recognized charges of $35 million related to other corporate restructuring activities, primarily for the impairment of corporate-region assets.