Business News
WEYERHAEUSER REPORTS 2ND QUARTER LOSS
Monday 03. August 2009 - Weyerhaeuser Company (NYSE: WY) today reported a net loss of $106 million for the second quarter, or $0.50 per share, on net sales from continuing operations of $1.4 billion.
This compares with a net loss of $96 million, or $0.45 per share, on net sales from continuing operations of $2.2 billion for the same period last year.
SIGNIFICANT SECOND QUARTER 2009 AFTER-TAX ITEMS
After-Tax Gain
(Charge)
($ millions)
Gain (Charge)
per share
(dollars)
Alternative fuel mixture credits
$72
$0.34
Impairments and reserves for Real Estate assets
($36)
($0.17)
Corporate restructuring and asset impairments
($30)
($0.14)
Closures, restructuring and asset impairments, primarily for Wood Products
($14)
($0.07)
Litigation and insurance settlements
$14
$0.07
Gain on sale of closed facilities
$13
$0.06
Excluding these items, the company reported a net loss of $125 million, or $0.59 per share, in the second quarter of 2009.
SIGNIFICANT SECOND QUARTER 2008 AFTER-TAX ITEMS
After-Tax Gain
(Charge)
($ millions)
Gain (Charge)
per share
(dollars)
Real estate impairments, reserves and land-related charges
($206)
($0.98)
Ownership restructuring of Uruguay assets
$101
$0.48
Changes to post-retirement benefits
$32
$0.15
Restructuring charges, primarily corporate staff
($24)
($0.11)
Closures and asset impairments, primarily for Wood Products
($20)
($0.09)
Release of tax liabilities
$14
$0.07
Excluding these items, the company earned $7 million, or $0.03 per share, in the second quarter of 2008.
“Although weve begun to experience some recovery in housing sales and starts, it is not yet clear that this improvement is driven by sustainable shifts in market fundamentals, and therefore our timberlands, wood products and real estate businesses continue to operate in an environment of uncertainty,” said Dan Fulton, president and chief executive officer. “We continue to reduce costs to make our businesses more competitive, and we continue to adjust our harvest and production levels to meet market demand.”
SUMMARY OF SECOND QUARTER FINANCIAL HIGHLIGHTS
Millions (except per share data)
2Q 2009
2Q 2008
Change
Net loss
($106)
($96)
($10)
Loss per share
($0.50)
($0.45)
($0.05)
Net sales from continuing operations
$1,391
$2,174
($783)
SEGMENT RESULTS FOR SECOND QUARTER
Contributions (Charges) to Pre-Tax Earnings
Millions
2Q 2009
2Q 2008
Change
Timberlands
$66
$103
($37)
Wood Products
($162)
($164)
$2
Cellulose Fibers
$100
$42
$58
Real Estate
($50)
($337)
$287
TIMBERLANDS
2Q 2009
1Q 2009
Change
Contribution to pre-tax earnings (millions)
$66
$40
$26
2Q 2009 Performance – Excluding a second quarter restructuring charge of $5 million, the segments earnings increased $31 million.
Second quarter earnings from operations improved due to increased sales of non-strategic lands, seasonally higher volumes, and lower operating and SG&A costs. Domestic and export log prices declined during the quarter. Losses related to international operations were $7 million, unchanged from first quarter.
3Q 2009 Outlook – Excluding the impact of non-strategic land sales, Weyerhaeuser expects third quarter earnings from the segment to be lower than second quarter due to additional harvest deferrals and lower log sales realizations.
WOOD PRODUCTS
2Q 2009
1Q 2009
Change
Charge to pre-tax earnings (millions)
($162)
($266)
$104
2Q 2009 Performance – Excluding the pre-tax items noted below, the segments second quarter losses decreased $29 million.
Second quarter 2009 included charges of $15 million primarily for closures, restructuring and asset impairments.
First quarter 2009 included charges of $71 million for closures, restructuring and asset impairments, and $19 million for an agreement in principle to settle alder litigation.
Continued cost control measures, lower log costs and slightly improved softwood lumber prices more than offset lower engineered wood products prices.
3Q 2009 Outlook – Weyerhaeuser expects a smaller loss from operations for the segment in third quarter due to improved operating efficiencies, cost control initiatives, and modest improvements in softwood lumber and oriented strand board prices. We will continue to take additional downtime to balance supply with demand.
CELLULOSE FIBERS
2Q 2009
1Q 2009
Change
Contribution to pre-tax earnings (millions)
$100
$31
$69
2Q 2009 Performance – Second quarter results include a pre-tax gain of $107 million related to alternative fuel mixture credits. Excluding the credit, the segments earnings declined $38 million in the second quarter.
An extensive boiler repair at Columbus, Mississippi and annual maintenance outages significantly lowered earnings in the second quarter. Lower average price realizations for pulp and liquid packaging were partially offset by reductions in fiber, energy, chemical and freight costs.
3Q 2009 Outlook – Weyerhaeuser expects earnings from operations for third quarter to be higher than second quarter primarily due to less maintenance downtime and continued cost control.
REAL ESTATE
2Q 2009
1Q 2009
Change
Charge to pre-tax earnings (millions)
($50)
($96)
$46
2Q 2009 Performance – Excluding the pre-tax items noted below, the segments loss improved $16 million in second quarter.
Asset impairments, restructuring and investment-related charges were $52 million in the second quarter compared to $72 million in the first 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. First quarter included a gain of $6 million from a land condemnation.
Homebuilding operations closed 464 single-family units, an 8 percent increase from first quarter. The average price of home sales closed was slightly higher than the previous quarter, primarily due to mix. The backlog of homes sold, but not closed, increased to slightly more than five months.
3Q 2009 Outlook – Weyerhaeuser expects a higher loss from homebuilding operations in the third quarter. Home sale closings are expected to be comparable to second quarter levels, with a change in mix resulting in lower average sales prices.