Weyerhaeuser reports first quarter results
April 27, 2018 - Weyerhaeuser Company reported first quarter net earnings of $269 million, or 35 cents per diluted share, on net sales of $1.9 billion. This compares with earnings of $157 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year.
- First quarter net earnings of $269 million, or $0.35 per diluted share
- Earnings before special items increased 65 per cent compared with first quarter 2017
- Adjusted EBITDA increased 20 per cent compared with first quarter 2017
- Highest first quarter Wood Products Adjusted EBITDA on record
Excluding net after-tax special charges of $6 million, the company reported net earnings of $275 million, or 36 cents per diluted share for the first quarter. This compares with net earnings before special items of $167 million for the same period last year and $234 million for the fourth quarter of 2017. Adjusted EBITDA for the first quarter was $544 million compared with $454 million for the first quarter of last year and $551 million for the fourth quarter of 2017.
“I am extremely pleased with our first quarter performance, as we fully capitalized on strong lumber, OSB and Western log markets to drive outstanding results, including the highest first quarter Wood Products EBITDA on record. This includes exceptional work by our teams to mitigate the effect of ongoing freight service disruptions,” said Doyle R. Simons, president and chief executive officer. “Looking forward, we are relentlessly focused on capturing the full benefit of improving housing starts and favorable market dynamics to drive value for shareholders.”
1Q 2018 Performance – In the West, domestic and export log sales realizations improved compared with the fourth quarter, and forestry costs declined seasonally. In the South, seasonally lower fee harvest volumes were offset by slightly higher average sales realizations, lower unit logging costs and reduced forestry expense.
2Q 2018 Outlook – Weyerhaeuser expects second quarter earnings and Adjusted EBITDA will be significantly higher than the second quarter of 2017, but lower than the first quarter of 2018. Compared with the first quarter, the company anticipates seasonally higher unit logging costs and increased road and forestry costs, partially offset by slightly higher Western log sales realizations. Average Southern log sales realizations are expected to be similar to the first quarter.
Real estate, energy and natural resources
1Q 2018 Performance – Earnings and Adjusted EBITDA decreased compared to the fourth quarter due to seasonally lower Real Estate sales.
2Q 2018 Outlook – Weyerhaeuser anticipates second quarter earnings and Adjusted EBITDA will be comparable to the first quarter. We continue to expect full year 2018 Adjusted EBITDA for the segment will be approximately $250 million.
1Q 2018 Performance – Sales volumes increased across most product lines compared with the fourth quarter due to seasonally higher demand, and operating rates improved. Higher average sales realizations for lumber and engineered wood products were partially offset by lower average sales realizations for oriented strand board and increased Western log costs. First quarter Adjusted EBITDA includes charges of $5 million for countervailing and anti-dumping duties on Canadian softwood lumber. These duties are no longer reported as a special item. First quarter special items consist of a $20 million pre-tax benefit from product remediation insurance proceeds.
2Q 2018 Outlook – Weyerhaeuser expects significantly higher earnings before special items and Adjusted EBITDA in the second quarter compared with the first quarter. The company anticipates seasonally higher sales volumes and improved operating rates. Higher average sales realizations for lumber, oriented strand board and engineered wood products will be partially offset by higher Western log costs.
1Q 2018 Performance – Non-cash charges for elimination of intercompany profit in inventory and LIFO increased compared with the fourth quarter due to higher values and volume for softwood lumber and Western log inventories. Non-cash non-operating pension and post-retirement expense also increased.
First quarter special items consist of $28 million in pre-tax charges for environmental remediation associated with a formerly owned mill site.