Business News
WEYERHAEUSER REPORTS FIRST QUARTER RESULTS
Friday 30. April 2010 - Weyerhaeuser Company (NYSE: WY) today reported a net loss of $20 million for the first quarter, or 10 cents per share, on net sales of $1.4 billion.
This compares with a net loss of $264 million, or $1.25 per share, on net sales from continuing operations of $1.3 billion for the same period last year.
SIGNIFICANT FIRST QUARTER 2010 AFTER-TAX ITEMS
After-Tax Gain
(Charge)
($ millions)
Gain (Charge)
per share
(dollars)
Income tax adjustments related to Medicare prescription drug subsidy and state tax law changes
($31)
($0.15)
Wood Products asset sales
$26
$0.12
Excluding these items, the company reported a net loss of $15 million, or 7 cents per share, in the first quarter of 2010.
SIGNIFICANT FIRST QUARTER 2009 AFTER-TAX ITEMS
After-Tax Charge
($ millions)
Charge
per share
(dollars)
Closures, restructuring and asset impairments, primarily for Wood Products
($46)
($0.22)
Impairments and reserves for Real Estate assets
($45)
($0.21)
Corporate restructuring and asset impairments
($17)
($0.08)
Reserve for an agreement in principle to settle alder litigation
($12)
($0.06)
Excluding these items, the companys net loss was $144 million, or 68 cents per share, in the first quarter of 2009.
“After many difficult quarters, were encouraged by the improvement in our performance,” said Dan Fulton, president and chief executive officer. “Financial results increased significantly compared with the prior quarter and on a year-over-year basis due to better market conditions and the work weve done to improve our long-term competitiveness. While the pace of the housing recovery remains uncertain, were moving in the right direction. In addition, recent approvals by our shareholders make it possible to complete our strategic conversion to a REIT.”
SUMMARY OF FIRST QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data)
1Q 2010
1Q 2009
Change
Net loss
($20)
($264)
$244
Loss per share
($0.10)
($1.25)
$1.15
Net sales
$1,419
$1,275
$144
SEGMENT RESULTS FOR FIRST QUARTER
(Contributions (Charges) to Pre-Tax Earnings)
Millions
1Q 2010
1Q 2009
Change
Timberlands
$81
$40
$41
Wood Products
($19)
($266)
$247
Cellulose Fibers
$19
$31
($12)
Real Estate
$31
($96)
$127
TIMBERLANDS
1Q 2010
4Q 2009
Change
Contribution to pre-tax earnings (millions)
$81
$13
$68
1Q 2010 Performance – Excluding fourth quarter charges of $15 million for asset impairments, primarily in international manufacturing operations, the segments earnings improved $53 million in the first quarter.
First quarter included pre-tax gains of $31 million from disposition of non-strategic timberlands, compared to $6 million in the fourth quarter. Earnings from operations increased due to improved log price realizations, higher fee volumes, and lower unit costs for logging, trucking and roads. Silviculture spending declined, primarily due to weather. Losses related to international operations, excluding the pre-tax items noted above, were $4 million in the first quarter compared to $6 million in the fourth quarter.
2Q 2010 Outlook – Excluding the disposition of non-strategic timberlands, Weyerhaeuser expects second quarter operating earnings from the segment to be somewhat lower than first quarter, as higher log prices are offset by increased silviculture and road costs and lower fee timber harvest in the south.
WOOD PRODUCTS
1Q 2010
4Q 2009
Change
Charge to pre-tax earnings (millions)
($19)
($208)
$189
1Q 2010 Performance – Excluding the pre-tax items noted below, the segments results improved by $60 million, resulting in a significantly smaller loss in the first quarter.
First quarter 2010 included pre-tax gains of $40 million from the sale of certain British Columbia forest licenses and associated rights, and $4 million from the sale of a sawmill.
Fourth quarter 2009 included charges of $85 million for closures, restructuring and asset impairments.
Lumber and oriented strand board sales realizations increased substantially, and operating rates improved. These improvements were partially offset by higher log costs.
2Q 2010 Outlook – Weyerhaeuser expects the segment to be profitable in the second quarter. The company anticipates improved operating rates, sales realizations and volumes, partially offset by higher log costs.
CELLULOSE FIBERS
1Q 2010
4Q 2009
Change
Contribution to pre-tax earnings (millions)
$19
$147
($128)
1Q 2010 Performance – Excluding the pre-tax items noted below, the segments earnings declined $15 million in the first quarter.
Fourth quarter 2009 included a pre-tax gain of $115 million related to alternative fuel mixture credits.
Fourth quarter also included charges of $2 million for asset impairments.
Higher average price realizations were offset by increased annual maintenance, fiber, and freight costs and somewhat lower shipment volumes.
2Q 2010 Outlook – Weyerhaeuser expects second quarter earnings from the segment to improve significantly compared to the first quarter. The company anticipates higher pulp price realizations, partially offset by increased freight and slightly higher annual maintenance costs.
REAL ESTATE
1Q 2010
4Q 2009
Change
Contribution (charge) to pre-tax earnings (millions)
$31
($89)
$120
1Q 2010 Performance – Excluding $100 million of fourth quarter asset impairments, restructuring, and investment related charges, the segments first quarter results improved by $20 million.
Improved first quarter operating results were primarily due to gains of $33 million on the sale of two commercial partnership interests. First quarter also included gains of $3 million on the sale of land and lots, compared to losses of $10 million in the fourth quarter. Home sale closings declined seasonally to 393 single-family homes, a 49 percent decrease from fourth quarter. Market conditions remain fragile. The average price of homes closed declined 7 percent from the previous quarter due to mix. Selling expenses declined due to lower volumes and cost improvements.
2Q 2010 Outlook -Weyerhaeuser expects second quarter results from single-family homebuilding operations to be comparable to the first quarter. The company anticipates an increase in home sale closings, offset by lower average sales prices due to mix.