Weyerhaeuser Reports 3Q Earnings of $91 Million On Sales of $3.7 Billion
Press release from the issuing company
FEDERAL WAY, Wash.--Oct. 23, 2001--Weyerhaeuser Company today reported third-quarter net earnings of $91 million, or 41 cents per share, that include nonrecurring after-tax items of $6 million.
This compares with net earnings of $199 million, or 90 cents per share, for the same period last year.
The nonrecurring after-tax items include a $20 million charge, or 9 cents per share, associated with the announcement that Weyerhaeuser will permanently close one containerboard machine in Springfield, Ore., and a fine paper machine and associated sheeter in Longview, Wash. This was partially offset by a $14 million, or 6 cents per share, one-time reduction in deferred income taxes for the third quarter due to recently enacted legislation reducing the British Columbia provincial corporate income tax rate.
Excluding nonrecurring after-tax items in both years, third-quarter earnings in 2001 were $97 million, or 44 cents per share, compared with $199 million, or 90 cents per share, for 2000.
Net sales for the third quarter of 2001 were $3.7 billion, down from $3.9 billion for the same quarter last year.
For the first nine months of 2001, Weyerhaeuser reported net earnings of $369 million, or $1.68 per share, compared with $646 million, or $2.84 per share last year. Excluding nonrecurring after-tax items in both years, results for the first nine months this year were $392 million, or $1.79 per share, compared with $728 million, or $3.20 per share, in 2000.
"Weak global economic conditions throughout the quarter, in addition to the uncertainty created by the events of Sept. 11, affected our third quarter results,'' said Steven R. Rogel, chairman, president and chief executive officer. "Our pulp and paper businesses felt the brunt of these global conditions. A drop in consumer confidence in late September also affected wood products. Given the extreme economic uncertainty, we expect difficult business conditions in the fourth quarter. Despite the downtime we are taking as a result of these market conditions, we remain focused on making further improvements in our operations.''
Results by segment for the third quarter:
Timberlands: Operating earnings were $97 million, down 13 percent from $111 million last year. Soft domestic and Japanese markets for lumber resulted in lower log prices compared with the same quarter last year. Weyerhaeuser expects pricing to be weaker in the fourth quarter with harvest volumes seasonally higher.
Wood Products: Operating earnings were $57 million, a 4 percent increase from $55 million in 2000. Prices weakened during the period and were approaching first quarter levels by the end of September. Uncertainty around the Countervailing Duty and anti-dumping proceedings continues to put pressure on Weyerhaeuser operations in Canada. Engineered wood products continue to be a strong performer, but order intake fell off sharply after Sept. 11. Normal seasonal conditions are expected to slow demand for wood products during the fourth quarter. Weyerhaeuser plans to curtail a number of its Wood Products facilities during the fourth quarter due to market conditions.
Pulp, Paper and Packaging: Operating earnings, before the effect of machine closures, were $73 million, down 71 percent from $252 million one year ago. Slowing economic conditions resulted in lower volume in most product lines compared with the third quarter last year. While pulp prices have stabilized, economic weakness is expected to result in further price erosion in most major product lines during the fourth quarter.
Real estate and related assets: Operating earnings were $75 million, up 39 percent from $54 million last year. Strong demand for housing in the markets in which the company operates contributed to the increase. Although new orders slowed following events on Sept. 11, most planned closings occurred. There is concern that economic uncertainty will slow new order activity. However, due to a backlog of orders, which are anticipated to close as planned, Weyerhaeuser expects good performance from this business in the fourth quarter.
In other third quarter items, Weyerhaeuser said:
It has achieved an annualized run rate of $197 million in pre-tax synergies related to the integration of MacMillan Bloedel and Trus Joist while incurring one-time pre-tax costs of $80 million since the acquisitions. The company expects to achieve its goal of $200 million in pre-tax synergies before the end of the year, well ahead of its 2002 goal.
The company will hold a live conference call on Oct. 23 to discuss results of the third quarter at 10 a.m. PDT (1 p.m. EDT). The call may be accessed through Weyerhaeuser's Internet site at www.weyerhaeuser.com by clicking on the "Listen to our conference call'' link.
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