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» Weyerhaeuse Q1 2010 Earnings Call Transcript
» Weyerhaeuser Company Q4 2009 Earnings Call Transcript
» Weyerhaeuser Company Q3 2009 Earnings Call Transcript
Also on this call, we will update shareholders on the steps remaining in the special dividend process. This morning, Weyerhaeuser reported net earnings of $14 million or $0.07 per diluted share on net sales of $1.8 billion. Significant after-tax items in the second quarter were a charge of $33 million or $0.16 per share for the early extinguishment of debt. In the quarter, we redeemed $548 million of the March 2012 bond. A gain of $5 million from Wood Products asset sales, primarily the Delta, BC, hardwood lumber mill. Including these items, the company reported net earnings of $42 million or $0.20 per diluted share. A GAAP reconciliation of special items is available on our website in the earnings information package.Please turn to Chart 4 in the earnings information package as I will discuss the waterfall chart. Chart 4 is a bar chart detailing the changes in the contribution to earnings before special items, interest and taxes. Changes in Weyerhaeuser's segment earnings from the first quarter of 2010 to the second quarter were as follows, beginning with the first bar on the left-hand side of the page. In the first quarter, Weyerhaeuser earned $80 million before special items, interest and taxes. Proceeding from left to right across the waterfall chart, we begin the discussion with Timberlands. Timberlands' earnings were $11 million lower in the second quarter than in the first quarter. Higher domestic and export log prices were offset by fewer nonstrategic land dispositions. Costs were also higher as silviculture activities postponed from the first quarter due to weather conditions occurred in the second quarter. Wood Products’ earnings were $52 million higher in Q2. This improvement was due to higher average price realizations for all major product lines, with significant increases in average oriented strand board, plywood and [audio gap 13:17] prices. OSB, plywood and lumber volumes also improved. These benefits were offset by higher log costs. Manufacturing costs were also higher due to the downtime taken late in the quarter.
Cellulose Fibers contributed $55 million more to earnings in the second quarter. This improvement was largely driven by higher price realizations with a benefit from lower energy costs. Real Estate’s contribution to earnings was $4 million lower in the second quarter from the first quarter. The volume of single-family closings was higher and margins increased. However, there was no partnership income in the second quarter.Corporate & Other was $4 million lower in the second quarter due to less favorable foreign exchange translation. The final bar to the right is Weyerhaeuser's second quarter pretax earnings of $168 million. I will now turn the call over to Dan Fulton. Dan? Daniel Fulton Thank you, Kathy. As I look back on the quarter, I'm very pleased with our progress on a number of fronts. We improved our operating earnings. All businesses were cash positive from operations, and we took the last major step towards our REIT conversions. Beginning with our performance, I'm encouraged by our ability to profitably manage operations in an uncertain economic climate without a sustained housing recovery. Timberlands delivered strong operating performance despite continued harvest deferrals, and we saw significant quarter-over-quarter improvement in Wood Products, Cellulose Fibers and single-family real estate operations. As Kathy noted, this improved performance generated $168 million in operating earnings before special items. This is an improvement of $88 million over the first quarter, and more significantly, it is an improvement of $229 million from one year ago. Last quarter, I noted that the pace of the housing recovery remained uncertain, and this continues to be true three months later. This has been especially evident in the market retreat following the expiration of the federal home buyer tax credit at the end of April. I also noted last quarter that we needed job growth and renewed consumer confidence to drive a sustained housing recovery, and this is still the case. The extreme volatility in Wood Products' prices during the quarter is further evidence of the challenging economic environment in which we are operating. Read the rest of this transcript for free on seekingalpha.com