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(WY) - Get Weyerhaeuser Company Report

beat top- and bottom-line expectations with net quarterly earnings of $1.12 billion, or $3.50 per share, compared with break-even results in the year-earlier period.

Net revenue jumped 17.7% to $1.66 billion.

Excluding one-time items, earnings were 25 cents per share, better than the 10 cents per share analysts expected. Analysts typically exclude one-time items when forecasting earnings estimates.

Stronger-than-expected results were attributed to increased demand in cellulose, a key material in papers and fibers.

Analysts from Barclays Capital reiterated an overweight rating on Weyerhaeuser shares following its earnings release, and raised their price target on the stock by $10 to $128.

RBC Capital Markets also reiterated an outperform rating, and raised their price target by $3 to $103.

Research firm Dahlman Rose initiated coverage of Weyerhaeuser earlier in October with a buy rating and $120 price target.

Weyerhaeuser said single-family home sales ticked up sequentially in the third quarter but it expects to book lower profits from its real estate business in the current quarter as

the market for new-homes remains weak.

"The overall housing market remains in an uncertain state," said CEO Dan Fulton. "We continue to defer (timber) harvest due to lower log demand."

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Weyerhaeuser considers itself a forest products company and is converting into a

real estate investment trust in an effort to cut its corporate tax liability. It grows and harvests timber on 22 million acres of forests, manufactures forest products, develops real estate and constructs homes.

Last month Weyerhaeuser declared a $5.6 billion special

dividend as part of its REIT conversion, 90% of which was stock, more than doubling its share count to 538 million.

Weyerhaeuser shares added 3.6% Friday afternoon to trade at $16.25.

Elsewhere in

homebuilder stocks Friday,

M.D.C. Holdings

(MDC) - Get M.D.C. Holdings, Inc. Report

added 2.6% after narrowing its quarterly losses thanks to an increase in home closings, average selling price and home gross margin.

>>M.D.C. Beats on Home Closings


SPDR S&P Homebuilders

(XHB) - Get SPDR S&P Homebuilders ETF Report

, an exchange-traded fund that tracks the homebuilder sector, gained 0.3%, while the

iShares Dow Jones US Home Construction

(ITB) - Get iShares U.S. Home Construction ETF Report

ETF also added 0.1%.

-- Written by Miriam Marcus Reimer in New York.

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Miriam Reimer


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