Weyerhaeuser Reports Q2 Earnings of $32 Million on Sales of $4.3 Billion
Press release from the issuing company
FEDERAL WAY, Wash., Aug. 3 -- Weyerhaeuser Company today reported net earnings of $32 million for the second quarter of 2007, or 15 cents per diluted share, on sales of $4.3 billion.
Second quarter 2007 earnings include the following after-tax items:
* A charge of $30 million, or 14 cents per diluted share, for asset impairments
Canadian distribution facilities.
* A charge of $27 million, or 12 cents per diluted share, related to the early extinguishment of debt.
* A charge of $25 million, or 12 cents per diluted share, related to legal settlements and a contract termination.
* A charge of $5 million, or 2 cents per diluted share, for additional costs related to the fine paper business and related assets that were distributed to Weyerhaeuser shareholders in the first quarter 2007 Domtar transaction.
* A net gain of $15 million, or 7 cents per diluted share, on the sale of
a previously closed box plant site in California and charges related to a fire and subsequent closure of a New Jersey box plant.
Excluding these items, the company earned $104 million, or 48 cents per diluted share, in the second quarter of 2007.
Second quarter 2006 results have been recast to reflect the fine paper business and related assets included in the Domtar transaction as discontinued operations and to apply a new accounting pronouncement to expense planned major maintenance costs as incurred.
For second quarter 2006, Weyerhaeuser net earnings were $298 million, or $1.19 per diluted share, on net sales of $4.9 billion. Second quarter 2006 earnings included the following after-tax items:
* A charge of $12 million, or 5 cents per diluted share, related to the restructuring of the Containerboard, Packaging and Recycling business model.
* A charge of $11 million, or 4 cents per diluted share, related to the closure of facilities.
In addition, net earnings for second quarter 2006 included a one-time tax benefit of $48 million, or 19 cents per diluted share, related to a change in Texas state income tax law, a reduction in the Canadian federal income tax rate and a deferred tax adjustment related to the Medicare Part D subsidy.
Excluding these items, the company earned $273 million, or $1.09 per diluted share, in the second quarter of 2006.
SUMMARY OF SECOND QUARTER BUSINESS PERFORMANCE
* Timberlands - Higher seasonal costs and lower sales of non-strategic timberlands adversely affected earnings.
* Wood Products - Lumber, plywood and oriented strand board prices increased slightly, but market conditions remained difficult.
* Cellulose Fibers - Prices continued to increase.
* Containerboard Packaging and Recycling - Normal seasonal upswing in packaging shipments occurred and average price realizations for packaging increased due to product mix, but fiber costs remain high.
* Real Estate and Related Assets - Market conditions remain challenging and margins continue to decline.
"In response to continued challenging market conditions, we managed production and costs throughout the second quarter," said Steven R. Rogel, chairman, president and chief executive officer. "Our focus remains on the strategic initiatives we've been implementing to create more value for shareholders. In the coming quarter, we will look for ways to further reduce costs and improve performance as we face challenges produced by the continuing sluggish housing market. Meeting these challenges will require tough decisions and the focus of every employee."
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