Weyerhaeuser 3Q profit tumbles 52 percent amid difficult business conditions
SEATTLE – Weyerhaeuser Co. reported a steep drop in third-quarter profits Friday, and the forest products company said it expects the residual effects of recent hurricanes and other industry pressures to hurt fourth-quarter earnings.Weyerhaeuser shares fell 9 cents to $61.78 in morning trading Friday on the New York Stock Exchange. Shares in the company have traded between $59.59 and $71.85 in the past 52 weeks.For the third quarter ended Sept. 25, Weyerhaeuser said earnings fell 52 percent to $285 million, or $1.16 per share, from $594 million, or $2.45 per share, in the comparable period last year. Total net sales and revenue edged down to $5.6 billion from $5.68 billion in the year-ago period.Federal Way-based Weyerhaeuser said its latest results included several special items, including charges amounting to 14 cents per share and gains of 37 cents per share. Last year’s results were boosted by gains totaling 83 cents per share.Excluding the items, earnings for the latest quarter were 93 cents per share. Analysts had forecast adjusted earnings for the latest quarter, excluding items, of 98 cents per share and revenue of $5.7 billion, according to a Thomson Financial poll.Chief Executive Steve Rogel said the company grappled with difficult business conditions in several segments during the third quarter, including lower prices for some products. The company warned that seasonal slowdowns and other woes would hurt earnings in the current fourth quarter as well.Chief Financial Officer Richard Taggard said the company expects earnings in all of its business segments except real estate to be lower in the fourth quarter than in the third.Weyerhaeuser said the recent hurricanes didn’t significantly hurt operations, but company executives cautioned that they expect to continue feeling residual effects in the form of higher energy, chemical and transportation costs. The company also said it was too early to say when and how it would feel the benefit of any increased construction as a result of hurricane Katrina.While cautioning that there might be more tough times ahead, Rogel said the company also was in the midst of a broad restructuring aimed at better responding to what he said is a changing wood products market.”We will not shrink from making the tough decisions,” Rogel said in a conference call with analysts.As part of those efforts, Rogel announced plans to close the 50-year-old pulp mill in Cosmopolis in southwest Washington, and the 81-year-old sawmill in nearby Aberdeen, which employ 342 hourly and salaried workers. Weyerhaeuser said some employees will receive severance pay or job opportunities at its other mills.”These mills are no longer economically sustainable and they are not core to our operations,” Rogel said.Weyerhaeuser also said Friday that it plans to buy back up to 18 million shares, or 7.4 percent of the company’s outstanding common stock.For the nine months ended Sept. 25, Weyerhaeuser reported earnings of $944 million, or $3.85 per share, on revenue of $16.85 billion. That compares with earnings of $1.08 billion, or $4.62 per share, on revenue of $16.32 billion, in the same period last year.