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Weyerhaeuser's (WY) Q1 Earnings Miss Estimates, Rise Y/Y
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Weyerhaeuser Company (WY - Free Report) reported first-quarter 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. Nonetheless, both the the metrics improved on a year-over-year basis. Operational excellence initiatives, solid momentum in U.S. housing, and solid repair and remodel demand bode well.
Meanwhile Devin W. Stockfish, president and chief executive officer of Weyerhaeuser stated, “I am extremely pleased with our first quarter results, as our businesses delivered Weyerhaeuser's highest quarterly Adjusted EBITDA on record despite severe winter weather and supply chain disruptions.”
Inside the Headlines
For the first quarter, the company reported adjusted earnings of 91 cents per share, missing the consensus mark of 93 cents. Nevertheless, the bottom line increased from the year-ago adjusted figure of 18 cents.
Net sales for the quarter came in at $2,506 million, missing the consensus mark of $2.624 million. However, the figure rallied 45% from $1,728 million reported in the prior-year quarter.
For the first quarter, adjusted EBITDA came in at $1,101 million, up from $413 million in the year-ago period. This marks its highest quarterly adjusted EBITDA on record.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Timberlands: Net sales (including inter-segment sales of $134 million) in the segment came in at $513 million, up 2% from the year-ago figure of $503 million.
In the West, average export log sales realizations grew sequentially. The company has shifted volume to the export market to serve higher Japanese demand. Average domestic log sales realizations were slightly lower on a sequential basis. Log and haul costs were higher due to more salvage activity, while forestry expenses were seasonally lower sequentially.
Meanwhile, in the South, average sales realizations for sawlogs and fiber logs improved sequentially. Fee harvest volumes were slightly lower due to severe winter weather. Forestry and road expenses decreased seasonally.
Adjusted EBITDA came in at $172 million, down slightly from $173 million in the year-ago quarter.
Real Estate, Energy and Natural Resources: For the first quarter, the segment’s net sales amounted to $106 million, down 5.4% year over year. Also, adjusted EBITDA came in at $96 million, down 5% year over year.
Wood Products: For the first quarter, the segment sales totaled $2,021 million, up 63.6% from $1,235 million in the prior-year period. Adjusted EBITDA came in at $889 million, up 383.2% from the year-ago figure of $184 million.
During the first quarter, benchmark prices for lumber and oriented strand board or OSB reached new record levels. Average sales realizations for lumber and oriented strand board grew 42% and 22%, respectively, on a sequential basis. Average realizations for engineered wood products or EWP also improved owing to the price increases.
Financial Highlights
As of Mar 31, 2021, Weyerhaeuser had cash and cash equivalents of $1,016 million, up from $495 million at 2020-end. Long-term debt was $5,325 million at quarter-end, which was unchanged from 2020-end.
Net cash from operations was $698 million for the quarter compared with $86 million in the year-ago period.
Outlook
For second-quarter 2021, the company expects earnings and adjusted EBITDA in the Timberland segment to be in line with the first quarter. In the West, it expects considerably high fee harvest volumes, offset by seasonally higher forestry and road expenses. In the South, the company expects more higher fee harvest volumes and comparable average sales realizations. This will be partly offset by seasonally higher forestry and road expenses. In the North, fee harvest volumes will be down from the first quarter due to spring break-up.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser anticipates earnings and adjusted EBITDA to be down sequentially in second-quarter 2021. This is due to the timing of real estate transactions. For 2021, it expects adjusted EBITDA to be $255 million.
Within the Wood Products segment, the company predicts earnings and adjusted EBITDA to be significantly higher on a sequential basis. For the second quarter, it expects increased sales volumes for lumber and sales realizations for EWP. This will be partly offset by higher raw material costs, mainly for OSB webstock, and lower operating rates for OSB due to planned maintenance outages.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Weyerhaeuser's (WY) Q1 Earnings Miss Estimates, Rise Y/Y
Weyerhaeuser Company (WY - Free Report) reported first-quarter 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. Nonetheless, both the the metrics improved on a year-over-year basis. Operational excellence initiatives, solid momentum in U.S. housing, and solid repair and remodel demand bode well.
Meanwhile Devin W. Stockfish, president and chief executive officer of Weyerhaeuser stated, “I am extremely pleased with our first quarter results, as our businesses delivered Weyerhaeuser's highest quarterly Adjusted EBITDA on record despite severe winter weather and supply chain disruptions.”
Inside the Headlines
For the first quarter, the company reported adjusted earnings of 91 cents per share, missing the consensus mark of 93 cents. Nevertheless, the bottom line increased from the year-ago adjusted figure of 18 cents.
Net sales for the quarter came in at $2,506 million, missing the consensus mark of $2.624 million. However, the figure rallied 45% from $1,728 million reported in the prior-year quarter.
For the first quarter, adjusted EBITDA came in at $1,101 million, up from $413 million in the year-ago period. This marks its highest quarterly adjusted EBITDA on record.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote
Segments Details
Timberlands: Net sales (including inter-segment sales of $134 million) in the segment came in at $513 million, up 2% from the year-ago figure of $503 million.
In the West, average export log sales realizations grew sequentially. The company has shifted volume to the export market to serve higher Japanese demand. Average domestic log sales realizations were slightly lower on a sequential basis. Log and haul costs were higher due to more salvage activity, while forestry expenses were seasonally lower sequentially.
Meanwhile, in the South, average sales realizations for sawlogs and fiber logs improved sequentially. Fee harvest volumes were slightly lower due to severe winter weather. Forestry and road expenses decreased seasonally.
Adjusted EBITDA came in at $172 million, down slightly from $173 million in the year-ago quarter.
Real Estate, Energy and Natural Resources: For the first quarter, the segment’s net sales amounted to $106 million, down 5.4% year over year. Also, adjusted EBITDA came in at $96 million, down 5% year over year.
Wood Products: For the first quarter, the segment sales totaled $2,021 million, up 63.6% from $1,235 million in the prior-year period. Adjusted EBITDA came in at $889 million, up 383.2% from the year-ago figure of $184 million.
During the first quarter, benchmark prices for lumber and oriented strand board or OSB reached new record levels. Average sales realizations for lumber and oriented strand board grew 42% and 22%, respectively, on a sequential basis. Average realizations for engineered wood products or EWP also improved owing to the price increases.
Financial Highlights
As of Mar 31, 2021, Weyerhaeuser had cash and cash equivalents of $1,016 million, up from $495 million at 2020-end. Long-term debt was $5,325 million at quarter-end, which was unchanged from 2020-end.
Net cash from operations was $698 million for the quarter compared with $86 million in the year-ago period.
Outlook
For second-quarter 2021, the company expects earnings and adjusted EBITDA in the Timberland segment to be in line with the first quarter. In the West, it expects considerably high fee harvest volumes, offset by seasonally higher forestry and road expenses. In the South, the company expects more higher fee harvest volumes and comparable average sales realizations. This will be partly offset by seasonally higher forestry and road expenses. In the North, fee harvest volumes will be down from the first quarter due to spring break-up.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser anticipates earnings and adjusted EBITDA to be down sequentially in second-quarter 2021. This is due to the timing of real estate transactions. For 2021, it expects adjusted EBITDA to be $255 million.
Within the Wood Products segment, the company predicts earnings and adjusted EBITDA to be significantly higher on a sequential basis. For the second quarter, it expects increased sales volumes for lumber and sales realizations for EWP. This will be partly offset by higher raw material costs, mainly for OSB webstock, and lower operating rates for OSB due to planned maintenance outages.
Zacks Rank
Weyerhaeuser — which shares space with Louisiana-PacificCorporation (LPX - Free Report) , PotlatchDeltic Corporation (PCH - Free Report) and UFP Industries, Inc. (UFPI - Free Report) in the Zacks Building Products - Wood industry — currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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