Weyerhaeuser posts Q4 net loss of $14M in year-end report
Weyerhaeuser Company has reported a fourth quarter net loss of $14 million, or two cents per diluted share, on net sales of $1.5 billion. This compares with a net loss of $93 million, or 12 cents per diluted share, on net sales of $1.6 billion for the same period last year and net earnings of $99 million for the third quarter of 2019.
Excluding net after-tax charges of $37 million for special items, the company reported fourth quarter net earnings of $23 million, or three cents per diluted share. This compares with net earnings before special items of $70 million for the same period last year and $59 million for the third quarter of 2019.
Adjusted EBITDA for the fourth quarter of 2019 was $260 million compared with $346 million for the same period last year and $308 million for the third quarter of 2019.
For the full year 2019, Weyerhaeuser reported a net loss of $76 million, or 10 cents per diluted share, on net sales of $6.6 billion. This compares with net earnings of $748 million on net sales of $7.5 billion for the full year 2018.
Full year 2019 includes net after-tax charges of $361 million for special items. Excluding these items, the company reported net earnings before special items of $285 million, or 39 cents per diluted share. This compares with net earnings before special items of $891 million for the full year 2018.
“Our 2019 performance reflects strong execution across all businesses despite significant headwinds from a sluggish housing market, global trade uncertainty, and persistently challenged commodity prices,” said Devin W. Stockfish, president and chief executive officer. “Through our continued focus on operational excellence, we achieved record low cost performance in lumber and oriented strand board and delivered the highest EBITDA ever from our Real Estate & ENR business. Additionally, we reduced our pension obligations by $1.5 billion, strategically optimized a significant portion of our Northern timberlands portfolio, and returned over $1 billion of cash to shareholders. Entering 2020, we are encouraged by the recent pickup in U.S. housing activity, and we expect modest growth will drive improvement across our markets as the year progresses. We remain focused on creating value for shareholders through industry-leading operating performance and disciplined capital allocation.”
Sales volumes declined seasonally and Western and Canadian log costs increased compared with the third quarter. Per unit manufacturing costs improved due to strong operating performance and ongoing operational excellence initiatives.
Average sales realizations for oriented strand board improved slightly. In lumber, although the benchmark Framing Lumber Composite price improved modestly in the fourth quarter, published average pricing for wide-width Southern yellow pine lumber decreased. Weyerhaeuser’s average lumber sales realizations were comparable with the third quarter average, reflecting the company’s regional and product mix.
Q1 2020 outlook: Weyerhaeuser anticipates first quarter earnings and Adjusted EBITDA will be slightly higher than the fourth quarter, before any improvement in average sales realizations. The company expects seasonally improved operating rates and manufacturing costs for engineered wood products and slightly higher sales volumes for lumber and oriented strand board.
In the West, average sales realizations for domestic and Japan export logs were modestly higher and fee harvest volumes increased slightly. Western road and forestry spending was seasonally lower. In the South, average log sales realizations declined slightly and fee harvest volumes were lower.
Fourth quarter special items include a $48 million gain on the sale of the company’s Michigan timberlands, which closed in November, and an $80 million noncash impairment charge related to the previously announced sale of our Montana timberlands. The Montana transaction is subject to customary closing conditions and is expected to be completed in the second quarter.
Q1 2020 outlook: Weyerhaeuser expects first quarter earnings and Adjusted EBITDA will be slightly higher than the fourth quarter. In the West, the company anticipates higher domestic and export log sales volumes, modestly higher average domestic log sales realizations and lower road spending. In the South, the company expects seasonally lower fee harvest volumes and average log sales realizations comparable with the fourth quarter average.
Read the full financial report here.