Weyerhaeuser sales and profits decline in Q4

Lumber, timberlands, and forest products giant Weyerhaeuser reported fourth quarter sales declined more than 18% to $1.8 billion from sales of $2.2 billion in the fourth quarter of 2021.

The Seattle-based company also posted fourth quarter net earnings of just $11 million marking a drastic dropoff from earnings of $416 million for the same period last year.

Weyerhaeuser reported that it completed the purchase of a group annuity contract that transfers approximately $420 million of the company's Canadian pension liabilities to an insurance carrier.

The contract purchase was funded from Canadian pension plan assets, with no company cash contribution required. As a result of the transaction, fourth quarter special items include a noncash after-tax settlement charge of $152 million.

During the fourth quarter, fee harvest volumes were slightly higher in the West than the third quarter, as harvest operations returned to normal levels faster than expected following the resolution of the work stoppage. 

Sales realizations were significantly lower, partially offset by moderately higher sales volumes, Weyerhaeuser said. 

Per unit log and haul costs were comparable, and forestry and road costs were seasonally lower. In the South, fee harvest volumes were slightly higher than the third quarter, while sales realizations and per unit log and haul costs were both comparable.

For the full year, Weyerhaeuser reported net sales were flat and matched 2021 sales of $10.2 billion. Net earnings for the full year decreased nearly 37% to $1.9 billion from 2021 net earnings of $2.6 billion.

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The Bottom Line: Weyerhaeuser sees a huge dropoff in fourth quarter earnings as full-year earnings slide 37%.

What the CEO said:  “Entering 2023, our balance sheet is exceptionally strong, and we are well positioned to navigate through a range of market conditions,” said Weyerhaeuser President and CEO, Devin Stockfish. “We remain focused on serving our customers and driving long-term value for shareholders through our unrivaled portfolio, industry-leading performance, strong ESG foundation, and disciplined capital allocation."

Company info: Click here to read the full fourth quarter 2022 and year-end financial report from Weyerhaeuser.