Consumables
WEYERHAEUSER REPORTS SECOND QUARTER RESULTS
Friday 27. July 2012 - Weyerhaeuser Company (NYSE: WY) today reported net earnings of $84 million for the second quarter, or 16 cents per diluted share, on net sales of $1.8 billion. This compares with net earnings of $10 million on net sales from continuing operations of $1.6 billion for the same period last year.
Earnings for the second quarter of 2012 include after-tax gains of $37 million from special items. Excluding these items, the company reported net earnings of $47 million, or 9 cents per diluted share. This compares with net earnings before special items of $32 million, or 6 cents per diluted share, in the second quarter of 2011.
“We are seeing signs of a rebound in the U.S. housing market, and as markets strengthen, the operational improvements within our Wood Products business are yielding clear results,” said Dan Fulton, president and chief executive officer. “Our ongoing work to improve performance across all businesses is positioning us to capture the full benefit of the market recovery as it unfolds.”
WEYERHAEUSER FINANCIAL HIGHLIGHTS
2012
2012
2011
(millions, except per share data)
1Q
2Q
2Q
Net sales from continuing operations
$1,494
$1,793
$1,610
Net earnings (1)
$41
$84
$10
Weighted average shares outstanding, diluted
540
540
541
Earnings per diluted share (1)
$0.08
$0.16
$0.02
Net earnings before special items
$9
$47
$32
Earnings per diluted share before special items
$0.02
$0.09
$0.06
Net cash from operations
($60)
$267
$114
Net change in cash and cash equivalents
($225)
$133
($582)
Cash and cash equivalents at end of period
$728
$861
$881
(1) The second quarter of 2011 included a net loss of $13 million from discontinued operations, or ($0.02) per diluted share, on net sales of $163 million. Discontinued operations include Weyerhaeuser’s hardwoods and Westwood Shipping Lines businesses, which were sold in the third quarter of 2011.
Weyerhaeuser began reporting elimination of intersegment profit on inventory and the LIFO reserve as part of Unallocated Items during second quarter 2012. Previously these company-level adjustments were recorded in the business segments. This change provides a better understanding of business segment operating results. For consistency, segment contributions to pre-tax earnings for prior periods have been adjusted to classify these amounts as part of Unallocated Items. There was no change to Weyerhaeuser’s consolidated net earnings.
TIMBERLANDS
FINANCIAL HIGHLIGHTS (millions)
1Q 2012
2Q 2012
Change
Net sales
$250
$262
$12
Contribution to pre-tax earnings
$70
$77
$7
2Q 2012 Performance – The segment’s earnings increased $7 million compared with the first quarter, primarily due to seasonally higher fee harvest in the West and South and increased demand for domestic and export logs. Average selling prices for export logs declined, and domestic prices for Western and Southern logs rose slightly.
3Q 2012 Outlook – Weyerhaeuser expects comparable earnings from the Timberlands segment in the third quarter. The company expects higher earnings from the disposition of non-strategic timberlands, partially offset by lower domestic selling prices for Western logs and a decline in Southern log price realizations due to mix.
WOOD PRODUCTS
FINANCIAL HIGHLIGHTS (millions)
1Q 2012
2Q 2012
Change
Net sales
$634
$776
$142
Contribution (charge) to pre-tax earnings before special items
(13)
30
$43
Pre-tax special items
6
6
GAAP contribution (charge) to pre-tax earnings
($13)
$36
$49
2Q 2012 Performance – Results before special items improved $43 million compared with the first quarter, primarily due to higher selling prices for lumber and oriented strand board and operational improvements. Lumber prices increased 13 percent, and prices for oriented strand board improved 9 percent. Sales volumes increased substantially.\
Special items for the second quarter include a $6 million pre-tax gain on the sale of property.
3Q 2012 Outlook – Weyerhaeuser anticipates lower earnings from the Wood Products segment in the third quarter. The company expects comparable sales volumes for most products and seasonally lower selling prices for lumber.
CELLULOSE FIBERS
FINANCIAL HIGHLIGHTS (millions)
1Q 2012
2Q 2012
Change
Net sales
$473
$459
($14)
Contribution to pre-tax earnings
$48
$36
($12)
2Q 2012 Performance – The segment’s earnings declined $12 million. Average selling prices for pulp were approximately flat compared with first quarter. Planned maintenance costs increased and sales volumes declined due to timing of shipments and reduced pulp production resulting from operational issues experienced during the quarter. First and second quarter each included two scheduled annual maintenance outages.
3Q 2012 Outlook – Weyerhaeuser expects significantly higher earnings from the Cellulose Fibers segment in the third quarter. The company anticipates improved productivity, lower annual maintenance expense, and reduced chemical, energy and fiber costs, partially offset by slightly lower selling prices for pulp.
REAL ESTATE
FINANCIAL HIGHLIGHTS (millions)
1Q 2012
2Q 2012
Change
Net sales
$137
$296
$159
Contribution (charge) to pre-tax earnings
($8)
$15
$23
2Q 2012 Performance – The segment’s earnings improved $23 million compared with the first quarter. Home closings increased seasonally to 508 single-family homes, and average margins on homes closed improved to nearly 20 percent due to mix. Second quarter results include earnings of $12 million from the sale of land and lots, compared with $1 million from the sale of lots in the first quarter.
At the end of the second quarter the backlog of homes sold, but not closed, totaled 1,033 units, a 53 percent increase compared with one year ago.
3Q 2012 Outlook – Weyerhaeuser expects slightly higher earnings from single-family homebuilding operations in the third quarter. The company anticipates seasonally higher home closings, partially offset by slightly lower average selling prices due to mix and slightly higher selling expenses due to the additional closing volume.
OTHER ITEMS
Special items for the second quarter include a pre-tax gain of $51 million from postretirement plan amendments. Weyerhaeuser expects no future gains related to these benefit changes, which were effective June 30, 2012.