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Weyerhaeuser (WY) to Post Q1 Earnings: What's in the Cards?

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Weyerhaeuser Company (WY - Free Report) is slated to report first-quarter 2021 results on Apr 30, before the opening bell.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2% but revenues beat the same by 6.8%. Quarterly adjusted earnings of 48 cents per share, however, increased significantly from the year-ago figure of 3 cents. Net sales for the quarter came in at $2,063 million, which increased 33.3% year over year.

Weyerhaeuser’s earnings topped the consensus mark in two of the last four quarters, with the average surprise being 265%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased to 93 cents from 89 cents per share over the past seven days. The estimated figure indicates 416.7% growth from the year-ago earnings of 18 cents per share. The consensus mark for revenues is $2.57 billion, suggesting 48.4% year-over-year growth.

Weyerhaeuser Company Price and EPS Surprise

Weyerhaeuser Company Price and EPS Surprise

Weyerhaeuser Company price-eps-surprise | Weyerhaeuser Company Quote

Factors to Note

Weyerhaeuser’s earnings and sales are expected to have increased in the first quarter. As the company’s performance is highly associated with the housing market, solid momentum in the markets served is expected to benefit the quarterly results. Solid demand for new housing across the United States might have helped Weyerhaeuser to propel the entire mix of businesses, including lumber, oriented strand board or OSB and timber.

As announced during fourth-quarter earnings call, the company expects first-quarter earnings and adjusted EBITDA for the Timberland segment (contributing nearly 25% to revenues) to increase sequentially. Geographically, in the West, it expects lower average domestic log sales realizations and road spending, coupled with higher unit logging and hauling costs. However, the company expects higher fee harvest volumes and comparable average log sales realizations in South.

The Zacks Consensus Estimate for the Timberland segment’s revenues is pegged at $530 million, implying a 5.4% improvement from first-quarter 2020 and 5.6% growth sequentially.

For the Wood Products segment (contributing 70% to total revenues), Weyerhaeuser predicts earnings and adjusted EBITDA to be significantly higher on a sequential basis. For the first quarter, it expects improvement in manufacturing costs and high sales volumes (primarily for lumber and engineered wood products). That said, the Zacks Consensus Estimate for the Wood Products segment revenues is pegged at $1,039 million, implying an increase of 15.9% year over year and 37.1% sequentially.

For the Real Estate, Energy and Natural Resources segment (contributing almost 5% to total revenues), Weyerhaeuser anticipates year-over-year earnings growth for first-quarter 2021. However, it expects adjusted EBITDA to be modestly lower on a year-over-year basis owing to the timing and mix of real estate transactions. The Zacks Consensus Estimate for the Real Estate, Energy and Natural Resources segment revenues is pegged at $77 million, implying a 31.3% year-over-year decline but 156.7% sequential growth.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Weyerhaeuser this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: The company has an Earnings ESP of +0.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Meritage Homes Corporation (MTH - Free Report) has an Earnings ESP of +0.67% and holds a Zacks Rank #3.

LouisianaPacific Corporation (LPX - Free Report) has an Earnings ESP of +11.75% and sports a Zacks Rank #1.

U.S. Concrete, Inc. has an Earnings ESP of +51.22% and a Zacks Rank #3.

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