Consumables

WEYERHAEUSER REPORTS FOURTH QUARTER, FULL YEAR RESULTS

Monday 07. February 2011 - FOURTH QUARTER NET EARNINGS OF $171 MILLION, OR $0.32 PER SHARE; FULL YEAR NET EARNINGS OF $1.281 BILLION, OR $3.99 PER SHARE; INCLUDES EARNINGS FROM INCOME TAX ADJUSTMENTS; INCREASE IN SHARES OUTSTANDING DUE TO SEPT. 2010 SPECIAL DIVIDEND

Weyerhaeuser Company (NYSE: WY) today reported net earnings of $171 million for the fourth quarter, or 32 cents per diluted share, on net sales of $1.7 billion. This compares with a net loss of $175 million on net sales of $1.5 billion for the same period last year.
Earnings for the fourth quarter of 2010 include after-tax gains of $119 million from special items. Excluding those items, the company reported net earnings of $52 million, or 10 cents per diluted share, in the fourth quarter of 2010. This compares to a net loss before special items of $109 million in the fourth quarter of 2009.
For the full year 2010, Weyerhaeuser reported net earnings of $1.281 billion, or $3.99 per diluted share, on net sales of $6.6 billion. This compares with a net loss of $545 million on net sales of $5.5 billion for the full year 2009. Earnings for the full year 2010 include $1.064 billion from income tax adjustments related to Weyerhaeuser’s conversion to a Real Estate Investment Trust (REIT).
“The actions we took in 2010 enhanced our ability to return value to our shareholders through our long-term strategy,” said Dan Fulton, president and chief executive officer. “The most significant, our conversion to a REIT, enhances our ability to manage and grow our core asset – more than six million acres of valuable timberlands.
“The record year for our Cellulose Fibers segment due to strong market conditions and excellent operational performance highlighted our 2010 results,” Fulton said. “Extremely challenging housing market conditions affected the financial performance of our Timberlands, Wood Products and Real Estate segments. We anticipate these market challenges will continue in 2011. However, I expect better performance due to ongoing operational improvements, which will create cost efficiencies and enhance the relative competitiveness of our businesses.”
WEYERHAEUSER FINANCIAL HIGHLIGHTS (millions, except per share data)
4Q 2010
3Q 2010
4Q 2009
Net sales
$1,664
$1,664
$1,455
Net earnings (loss)
$171
$1,116
($175)
Weighted average shares outstanding, diluted
538
318
211
Earnings (loss) per diluted share
$0.32
$3.50
($0.83)
Net earnings (loss) before special items
$52
$81
($109)
Earnings (loss) per diluted share before special items
$0.10
$0.25
($0.52)
As of the end of the fourth quarter of 2010, Weyerhaeuser had 538 million shares outstanding on a diluted basis. Weyerhaeuser’s shares outstanding increased during the third quarter of 2010 due to payment of a special dividend of approximately 324 million shares of common stock and $560 million in cash, paid in conjunction with the company’s conversion to a REIT.
TIMBERLANDS
FINANCIAL HIGHLIGHTS (millions)
4Q 2010
3Q 2010
4Q 2009
Net sales
$207
$240
$156
Contribution to pre-tax earnings before special items
$56
$75
$28
Pre-tax gains (charges) from special items
$0
$0
($15)
GAAP contribution to pre-tax earnings
$56
$75
$13
4Q 2010 Performance – Fourth quarter earnings declined $19 million compared with third quarter, primarily due to fewer dispositions of non-strategic timberlands. Per unit logging costs also increased, as western operations took downtime to match lower seasonal and market demand. Fourth quarter included $19 million from disposition of non-strategic timberlands, compared with $34 million in the third quarter. Weyerhaeuser continues to defer timber harvest.
1Q 2011 Outlook – Excluding the disposition of non-strategic timberlands, Weyerhaeuser expects higher earnings in the first quarter compared with the fourth. The company expects higher selling prices for western logs and seasonally higher harvest volumes. A sale of approximately 82,000 acres of non-strategic timberlands in southwest Washington announced this morning will contribute approximately $150 million in pre-tax earnings.
WOOD PRODUCTS
FINANCIAL HIGHLIGHTS (millions)
4Q 2010
3Q 2010
4Q 2009
Net sales
$572
$626
$510
Charge to pre-tax earnings before special items
($85)
($100)
($123)
Pre-tax gains (charges) from special items
($103)
$0
($85)
GAAP charge to pre-tax earnings
($188)
($100)
($208)
4Q 2010 Performance – The segment’s results before special items improved $15 million compared with the third quarter. Fourth quarter included special items of $103 million for asset impairments, closures and restructuring.
Fourth quarter results improved due to slightly lower log costs and reduced selling, general and administrative expenses. These factors were partially offset by seasonally lower sales volumes.
1Q 2011 Outlook – Excluding the effect of fourth quarter special items, Weyerhaeuser anticipates a smaller loss from the segment in the first quarter due to improved operating rates, higher selling prices, and continued cost reductions.
CELLULOSE FIBERS
FINANCIAL HIGHLIGHTS (millions)
4Q 2010
3Q 2010
4Q 2009
Net sales
$511
$522
$408
Contribution to pre-tax earnings before special items
$138
$181
$34
Pre-tax gains (charges) from special items
$0
$0
$113
GAAP contribution to pre-tax earnings
$138
$181
$147
4Q 2010 Performance – The segment’s fourth quarter earnings declined $43 million compared with third quarter due to increased maintenance costs and lower production resulting from an annual outage at the New Bern, N.C. mill. Fiber, chemical and energy costs also increased. There were no maintenance outages in the third quarter.
1Q 2011 Outlook – Weyerhaeuser expects Cellulose Fibers earnings to decline in the first quarter due to an increase in the number of scheduled annual maintenance outages.
REAL ESTATE
FINANCIAL HIGHLIGHTS (millions)
4Q 2010
3Q 2010
4Q 2009
Net sales
$305
$210
$337
Contribution to pre-tax earnings before special items
$33
$20
$11
Pre-tax gains (charges) from special items
($20)
$0
($100)
GAAP contribution (charge) to pre-tax earnings
$13
$20
($89)
4Q 2010 Performance – The segment’s earnings before special items increased $13 million compared with the third quarter. Fourth quarter included special items of $20 million for asset impairments and restructuring.
Earnings from single-family homebuilding rose due to additional home sale closings and higher margins. Home sale closings increased 21 percent compared with the third quarter to 606 single-family homes. Margins on homes closed improved slightly due to mix.
Fourth quarter earnings included $6 million from the sale of land, lots and apartments, compared with $4 million from sale of land and lots in the third quarter.
1Q 2011 Outlook – Weyerhaeuser expects a small loss from single-family homebuilding operations in the first quarter due to seasonally fewer home sale closings and lower margins.
OTHER
Fourth quarter earnings include a pre-tax gain of $46 million on the sale of five short line railroads. Fourth quarter also includes income tax adjustments of $177 million, including benefits of $149 million from the Cellulosic Biofuel Producers Credit and $22 million from reversal of deferred tax liabilities related to the company’s REIT conversion.