Profits decline at Weyerhaeuser
Forest products giant Weyerhaeuser reported third quarter 2019 net sales of $1.7 billion, more than a 10% decline compared to net sales of $1.9 billion for the third quarter 2018.
The Seattle, Wa.-based company also reported third quarter net earnings of $99 million, down substantially from profits of $255 million for the same period last year.
Excluding a net after-tax benefit of $40 million for special items, primarily relating to a product remediation insurance recovery, the company reported third quarter net earnings of $59 million.
During the quarter, seasonally higher sales volumes for most products were more than offset by higher unit manufacturing costs, primarily due to scheduled downtime in engineered wood products and modest hurricane-related downtime in the company's Southern lumber operations, the company said.
Also in the third quarter, Weyerhaeuser announced it is selling 55,000 acres of timberlands in a $300 million deal that is expected to close in the fourth quarter. Weyerhaeuser owns or controls about 12 million acres of timberlands in the United States in addition to timberlands it manages in Canada.
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The bottom line: Challenging market conditions, including sagging lumber prices, hit Weyerhaeuser profits hard in the third quarter.
What the CEO said: “In the third quarter, we again delivered strong operating performance despite challenging market conditions," said Devin Stockfish, Weyerhaeuser president and CEO. "We also announced the pending sale of 555,000 acres in Michigan, which will further optimize our timberlands portfolio. Looking forward, we continue to expect that U.S. housing activity will follow a modest growth trajectory. We remain intently focused on achieving operational excellence in every aspect of our business and fully capitalizing on every available market opportunity to drive value for our shareholders."
Company info: The full third quarter 2019 report from Weyerhaeuser can be read here.
The Seattle, Wa.-based company also reported third quarter net earnings of $99 million, down substantially from profits of $255 million for the same period last year.
Excluding a net after-tax benefit of $40 million for special items, primarily relating to a product remediation insurance recovery, the company reported third quarter net earnings of $59 million.
During the quarter, seasonally higher sales volumes for most products were more than offset by higher unit manufacturing costs, primarily due to scheduled downtime in engineered wood products and modest hurricane-related downtime in the company's Southern lumber operations, the company said.
Also in the third quarter, Weyerhaeuser announced it is selling 55,000 acres of timberlands in a $300 million deal that is expected to close in the fourth quarter. Weyerhaeuser owns or controls about 12 million acres of timberlands in the United States in addition to timberlands it manages in Canada.
###
The bottom line: Challenging market conditions, including sagging lumber prices, hit Weyerhaeuser profits hard in the third quarter.
What the CEO said: “In the third quarter, we again delivered strong operating performance despite challenging market conditions," said Devin Stockfish, Weyerhaeuser president and CEO. "We also announced the pending sale of 555,000 acres in Michigan, which will further optimize our timberlands portfolio. Looking forward, we continue to expect that U.S. housing activity will follow a modest growth trajectory. We remain intently focused on achieving operational excellence in every aspect of our business and fully capitalizing on every available market opportunity to drive value for our shareholders."
Company info: The full third quarter 2019 report from Weyerhaeuser can be read here.