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What's in Store for Weyerhaeuser (WY) This Earnings Season?
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Weyerhaeuser Company (WY - Free Report) is slated to report second-quarter 2021 results on Jul 30, before the opening bell.
In the last reported quarter, the company’s earnings and revenues missed the Zacks Consensus Estimate by 2.2% and 4.5%, respectively. Nevertheless, quarterly adjusted earnings of 91 cents per share increased significantly from the year-ago figure of 18 cents. Net sales for the quarter came in at $2,506 million, which increased 45% year over year.
Weyerhaeuser’s earnings topped the consensus mark in two of the last four quarters and missed on the other two occasions, with the average surprise being 257.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $1.38 from $1.39 per share over the past 30 days. The estimated figure indicates 1,154.6% growth from the year-ago earnings of 11 cents per share. The consensus mark for revenues is $2.92 billion, suggesting 78.9% year-over-year growth.
Weyerhaeuser’s earnings and sales are expected to have increased in the second 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 and other wood companies like Potlatch Corporation (PCH - Free Report) to propel the entire mix of businesses, including lumber, oriented strand board or OSB and timber.
As announced during first-quarter earnings call, the company expects second-quarter earnings and adjusted EBITDA for the Timberland segment (contributing approximately 15% to revenues) to be in line with the first quarter. Geographically, in the West, it expects considerably high fee harvest volumes, offset by seasonally higher forestry and road expenses. In the South, the company expects higher fee harvest volumes and comparable average sales realizations, partly offset by seasonally increased forestry and road expenses. In the North, fee harvest volumes will likely be down from the first quarter due to spring break-up.
The Zacks Consensus Estimate for the Timberland segment’s revenues is pegged at $548 million, implying a 14.2% improvement from second-quarter 2020 and 6.8% growth sequentially.
For the Wood Products segment (contributing 80% to total revenues), Weyerhaeuser predicts earnings and adjusted EBITDA to be significantly higher on a sequential basis (excluding the effects of changes in average sales realizations for lumber and oriented strand board). For the second quarter, it expects increased sales volumes for lumber and sales realizations for EWP, partly offset by higher raw material costs — mainly for OSB webstock — and lower operating rates for OSB due to planned maintenance outages.
That said, the Zacks Consensus Estimate for the Wood Products segment revenues is pegged at $1,413 million, implying an increase of 17.1% year over year but a decline of 30.1% sequentially.
For the Real Estate, Energy and Natural Resources segment (contributing about 4% to total revenues), Weyerhaeuser anticipates earnings and adjusted EBITDA to be down moderately on a sequential basis for second-quarter 2021. This is due to the timing of real estate transactions.
The Zacks Consensus Estimate for the Real Estate, Energy and Natural Resources segment revenues is pegged at $99 million, implying 52.3% year-over-year growth but a 6.6% sequential decline.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Weyerhaeuser this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -1.94%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some 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.
Primoris Services Corporation (PRIM - Free Report) has an Earnings ESP of +0.96% and a Zacks Rank #3.
Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +10.32% and holds a Zacks Rank #2.
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What's in Store for Weyerhaeuser (WY) This Earnings Season?
Weyerhaeuser Company (WY - Free Report) is slated to report second-quarter 2021 results on Jul 30, before the opening bell.
In the last reported quarter, the company’s earnings and revenues missed the Zacks Consensus Estimate by 2.2% and 4.5%, respectively. Nevertheless, quarterly adjusted earnings of 91 cents per share increased significantly from the year-ago figure of 18 cents. Net sales for the quarter came in at $2,506 million, which increased 45% year over year.
Weyerhaeuser’s earnings topped the consensus mark in two of the last four quarters and missed on the other two occasions, with the average surprise being 257.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $1.38 from $1.39 per share over the past 30 days. The estimated figure indicates 1,154.6% growth from the year-ago earnings of 11 cents per share. The consensus mark for revenues is $2.92 billion, suggesting 78.9% year-over-year growth.
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 second 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 and other wood companies like Potlatch Corporation (PCH - Free Report) to propel the entire mix of businesses, including lumber, oriented strand board or OSB and timber.
As announced during first-quarter earnings call, the company expects second-quarter earnings and adjusted EBITDA for the Timberland segment (contributing approximately 15% to revenues) to be in line with the first quarter. Geographically, in the West, it expects considerably high fee harvest volumes, offset by seasonally higher forestry and road expenses. In the South, the company expects higher fee harvest volumes and comparable average sales realizations, partly offset by seasonally increased forestry and road expenses. In the North, fee harvest volumes will likely be down from the first quarter due to spring break-up.
The Zacks Consensus Estimate for the Timberland segment’s revenues is pegged at $548 million, implying a 14.2% improvement from second-quarter 2020 and 6.8% growth sequentially.
For the Wood Products segment (contributing 80% to total revenues), Weyerhaeuser predicts earnings and adjusted EBITDA to be significantly higher on a sequential basis (excluding the effects of changes in average sales realizations for lumber and oriented strand board). For the second quarter, it expects increased sales volumes for lumber and sales realizations for EWP, partly offset by higher raw material costs — mainly for OSB webstock — and lower operating rates for OSB due to planned maintenance outages.
That said, the Zacks Consensus Estimate for the Wood Products segment revenues is pegged at $1,413 million, implying an increase of 17.1% year over year but a decline of 30.1% sequentially.
For the Real Estate, Energy and Natural Resources segment (contributing about 4% to total revenues), Weyerhaeuser anticipates earnings and adjusted EBITDA to be down moderately on a sequential basis for second-quarter 2021. This is due to the timing of real estate transactions.
The Zacks Consensus Estimate for the Real Estate, Energy and Natural Resources segment revenues is pegged at $99 million, implying 52.3% year-over-year growth but a 6.6% sequential decline.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Weyerhaeuser this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -1.94%. 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 #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Worth a Look
Here are some 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.
Primoris Services Corporation (PRIM - Free Report) has an Earnings ESP of +0.96% and a Zacks Rank #3.
Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +10.32% and holds a Zacks Rank #2.