Weyerhaeuser posts smaller 1st-quarter loss on sale of land, license rights

Weyerhaeuser narrows 1st-qtr loss with land sales

FEDERAL WAY, Wash. — Lumber and wood products producer Weyerhaeuser said Thursday that the sale of land and license rights helped to narrow its first-quarter loss by 92 percent.

The company remains cautious about a recovery in both the economy and the housing market.

“After many difficult quarters, we’re encouraged by the improvement in our performance,” said Dan Fulton, president and CEO. “While the pace of the housing recovery remains uncertain, we’re moving in the right direction.”

Company shares rose more than 3 percent in early trading.

The company has aggressively cut overhead and reported Thursday that total costs and expenses dropped 17 percent to $1.34 billion, from $1.6 billion last year.

For the three months ended March 31, the company posted a loss of $20 million, or 10 cents per share, compared with a loss of $264 million, or $1.25 per share, in the year-ago period.

Excluding adjustments to account for changes in the Medicare prescription drug subsidy, state tax law changes, and wood products asset sales, the net loss narrowed to $15 million, or 7 cents per share.

Sales rose to $1.42 billion, from $1.28 billion last year.

Analysts polled by Thomson Reuters, on average, expected a loss of 25 cents per share, on sales of $1.39 billion. Analysts typically exclude one-time charges and gains from their estimates.

Weyerhaeuser’s biggest improvement came in its wood products division, which posted a pretax loss of $19 million, versus a loss of $266 million a year ago. Much of that gain reflected the sale of forest licenses and related rights in British Columbia, Canada, and from the sale of a sawmill. The company said it expects the segment to turn profitable this quarter.

The real estate division posted a net pretax gain of $31 million, reversing a year-ago loss of $96 million. The company sold two commercial partnership interests and reversed last year’s loss on land sales.

Home sale closings and average prices continued to decline, however. Second-quarter results are expected to be comparable to the first quarter.

Pretax profit in its Timberlands division more than doubled to $81 million, from $40 million last year, as the company netted $31 million from land sales. Earnings improved because of better log prices, higher fee volumes and lower costs for logging, trucking and roads. Profits this quarter are expected to be smaller because of rising costs and a more meager harvest.

The cellulose fibers division saw pretax profit fell to $19 million, from $31 million, reflecting higher prices but also higher maintenance, materials and shipping costs, and lower shipment volumes. That should improve significantly this quarter, Weyerhaeuser said.

Weyerhaeuser Co. shares jumped $1.69 to $50.99 Thursday.