Weyerhaeuser reports net earnings of $128M in Q2 2019
Weyerhaeuser recently reported second quarter net earnings of $128 million, or 17 cents per diluted share, on net sales of $1.7 billion. This compares with net earnings of $317 million, or 42 cents per diluted share, on net sales of $2.1 billion for the same period last year.
Excluding an after-tax adjustment of $5 million for special items, the company reported second quarter net earnings of $123 million, or 16 cents per diluted share. This compares with net earnings before special items of $332 million for the same period last year and $80 million for the first quarter of 2019.
Adjusted EBITDA for the second quarter of 2019 was $343 million compared with $637 million for the same period last year and $365 million for the first quarter of 2019.
“Our businesses delivered strong operating performance in the second quarter despite various market and weather-related challenges,” said Devin W. Stockfish, president and chief executive officer. “This includes the lowest controllable lumber manufacturing cost we have ever reported. Looking forward, although record-setting rainfall has held back U.S. housing activity in the first half of 2019, we see solid underlying market conditions and continue to expect the housing market will follow a modest growth trajectory. We remain committed to delivering industry-leading performance, fully capitalizing on all market conditions, and driving superior value for shareholders.”
In the West, forestry and road spending increased seasonally compared with the first quarter, and average log sales realizations decreased. Export log realizations were slightly lower, and the proportion of sales to export markets decreased due to the timing of vessel sailings. In the South, average log sales realizations were comparable, with a modest reduction in fee harvest volumes due to continued wet weather. In the North, fee harvest volumes were seasonally lower due to spring breakup.
Weyerhaeuser expects third quarter earnings and Adjusted EBITDA will be lower than the second quarter. In the West, the company anticipates seasonally lower harvest volumes, slightly higher road costs, and average log sales realizations modestly lower than the second quarter average. In the South, the company expects seasonally higher forestry expenses, largely offset by increased fee harvest volumes. Average Southern log sales realizations should be comparable to the second quarter.
Earnings and Adjusted EBITDA increased compared with the first quarter due to seasonally higher sales volumes and improved per unit manufacturing costs in engineered wood products. This was partially offset by a modest decline in average sales realizations for oriented strand board and slightly lower average sales realizations for lumber.
Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be comparable to the second quarter before any improvement in average sales realizations. The company expects comparable sales volumes and slightly lower fibre costs, offset by slightly higher unit manufacturing costs for engineered wood products.