We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Weyerhaeuser Company (WY - Free Report) reported lower-than-expected results for the fourth quarter of 2017, with earnings and sales lagging estimates by 11.4% and 2.5%, respectively.
Earnings from continuing operations before special items in the quarter came in at 31 cents per share, missing the Zacks Consensus Estimate of 35 cents. However, the bottom line surged 121.4% from the year-ago tally of 14 cents.
For 2017, the company’s earnings from continuing operations before special items were $1.15, up from 75 cents in 2016.
Higher Timberlands and Wood Products Drive Top Line
Net sales in the fourth quarter were $1,823 million, increasing 14.2% year over year.
However, the top line lagged the Zacks Consensus Estimate of approximately $1.9 billion.
The company operates through three business segments, results of which are detailed below:
Timberlands: The segment’s revenues (excluding intersegment sales) in the quarter came in at $496 million, up 7.1% year over year. It accounted for 27.2% of net sales.
Real Estate, Energy and Natural Resources: The segment’s revenues, accounting for 5.4% of net sales, were $99 million. The figure decreased 2% from the year-ago tally.
Wood Products: The segment generated revenues (excluding intersegment sales) of $1,228 million, accounting for 67.4% of net sales. Compared with the year-ago quarter, the figure was up 19%.
For 2017, the company’s net sales were $7,196 million, up 13.1% year over year.
Margin Profile Improves
In the quarter, Weyerhaeuser’s cost of sales increased 3% year over year while represented 72.2% of net sales versus 80.1% in the year-ago quarter. Gross margin grew 790 basis points to 27.8%.
Selling expenses, as a percentage of net sales, came in at 1.2% while general and administrative expenses were at 3.9%. Research and development expenses were $2 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $551 million in the quarter, increasing 37.8% year over year. Adjusted EBITDA margin came in at 30.2% versus 25.1% in the year-ago quarter.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Weyerhaeuser’s cash and cash equivalents were $824 million, up 65.8% from $497 million in the preceding quarter end. Long-term debt was roughly flat at $5,930 million.
In the quarter, the company’s net cash generated from operating activities was $354 million versus $151 million used in the year-ago quarter. Capital spending declined 24.1% year over year to $145 million. During the quarter, the company paid dividends worth $242 million.
Outlook
For first-quarter 2018, Weyerhaeuser anticipates sequentially comparable earnings and adjusted EBITDA from the Timberland segment. Results in the West will gain from rise in log sales realization while suffer from lower fee harvest volume. In the South, flat realizations, lower fee harvest volumes and rise in trucking expenses might adversely influence results.
For the Real Estate, Energy and Natural Resources segment, the company anticipates sequentially lower earnings and adjusted EBITDA in the first quarter. Weak Real Estate sales and a decline in royalties generated from the Energy and Natural Resources businesses will impact results.
For the Wood Products segment, the company predicts sequentially comparable earnings and adjusted EBITDA. For lumber, higher sales realizations and volumes as well as better operating rates will benefit results. For oriented strand board, fall in sales realizations will adversely impact results.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Louisiana-Pacific’s earnings estimates for 2018 were revised upward over the last 60 days. Also, the company delivered an average positive earnings surprise of 3.98% in the last four quarters.
Potlatch Corporation pulled off an average positive earnings surprise of 36.91% over the trailing four quarters. Also, its earnings estimates for 2018 and 2019 were revised upward over the last 60 days.
Boise Cascade performed well in the last four quarters, with a positive earnings surprise of 116.28%. Also, its earnings estimates for 2018 improved in the last 60 days.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Image: Bigstock
Weyerhaeuser (WY) Q4 Earnings Lag, Rise Y/Y, Margins Expand
Weyerhaeuser Company (WY - Free Report) reported lower-than-expected results for the fourth quarter of 2017, with earnings and sales lagging estimates by 11.4% and 2.5%, respectively.
Earnings from continuing operations before special items in the quarter came in at 31 cents per share, missing the Zacks Consensus Estimate of 35 cents. However, the bottom line surged 121.4% from the year-ago tally of 14 cents.
For 2017, the company’s earnings from continuing operations before special items were $1.15, up from 75 cents in 2016.
Higher Timberlands and Wood Products Drive Top Line
Net sales in the fourth quarter were $1,823 million, increasing 14.2% year over year.
However, the top line lagged the Zacks Consensus Estimate of approximately $1.9 billion.
The company operates through three business segments, results of which are detailed below:
Timberlands: The segment’s revenues (excluding intersegment sales) in the quarter came in at $496 million, up 7.1% year over year. It accounted for 27.2% of net sales.
Real Estate, Energy and Natural Resources: The segment’s revenues, accounting for 5.4% of net sales, were $99 million. The figure decreased 2% from the year-ago tally.
Wood Products: The segment generated revenues (excluding intersegment sales) of $1,228 million, accounting for 67.4% of net sales. Compared with the year-ago quarter, the figure was up 19%.
For 2017, the company’s net sales were $7,196 million, up 13.1% year over year.
Margin Profile Improves
In the quarter, Weyerhaeuser’s cost of sales increased 3% year over year while represented 72.2% of net sales versus 80.1% in the year-ago quarter. Gross margin grew 790 basis points to 27.8%.
Selling expenses, as a percentage of net sales, came in at 1.2% while general and administrative expenses were at 3.9%. Research and development expenses were $2 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $551 million in the quarter, increasing 37.8% year over year. Adjusted EBITDA margin came in at 30.2% versus 25.1% in the year-ago quarter.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Weyerhaeuser’s cash and cash equivalents were $824 million, up 65.8% from $497 million in the preceding quarter end. Long-term debt was roughly flat at $5,930 million.
In the quarter, the company’s net cash generated from operating activities was $354 million versus $151 million used in the year-ago quarter. Capital spending declined 24.1% year over year to $145 million. During the quarter, the company paid dividends worth $242 million.
Outlook
For first-quarter 2018, Weyerhaeuser anticipates sequentially comparable earnings and adjusted EBITDA from the Timberland segment. Results in the West will gain from rise in log sales realization while suffer from lower fee harvest volume. In the South, flat realizations, lower fee harvest volumes and rise in trucking expenses might adversely influence results.
For the Real Estate, Energy and Natural Resources segment, the company anticipates sequentially lower earnings and adjusted EBITDA in the first quarter. Weak Real Estate sales and a decline in royalties generated from the Energy and Natural Resources businesses will impact results.
For the Wood Products segment, the company predicts sequentially comparable earnings and adjusted EBITDA. For lumber, higher sales realizations and volumes as well as better operating rates will benefit results. For oriented strand board, fall in sales realizations will adversely impact results.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company Price, Consensus and EPS Surprise | Weyerhaeuser Company Quote
Zacks Rank & Key Picks
With a market capitalization of approximately $28 billion, Weyerhaeuser carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry are Louisiana-Pacific Corporation (LPX - Free Report) , Potlatch Corporation (PCH - Free Report) and Boise Cascade, L.L.C. (BCC - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Louisiana-Pacific’s earnings estimates for 2018 were revised upward over the last 60 days. Also, the company delivered an average positive earnings surprise of 3.98% in the last four quarters.
Potlatch Corporation pulled off an average positive earnings surprise of 36.91% over the trailing four quarters. Also, its earnings estimates for 2018 and 2019 were revised upward over the last 60 days.
Boise Cascade performed well in the last four quarters, with a positive earnings surprise of 116.28%. Also, its earnings estimates for 2018 improved in the last 60 days.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Click here to access these stocks. >>