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In the last reported quarter, the company’s earnings had surpassed the Zacks Consensus Estimate by 33.3% but net sales missed the same by 3.2%. Quarterly adjusted earnings and net sales for the quarter, however, decreased 51% and 17.4%, respectively.
Weyerhaeuser’s earnings beat the consensus mark in all the last four quarters, with the average surprise being 13.7%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to 15 cents from 17 cents per share over the past seven days. The estimated figure indicates a decrease of 88.6% from the year-ago level. The consensus mark for revenues is $1.90 billion, suggesting a 39.1% year-over-year decline.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Slow construction activities are expected to weigh on Weyerhaeuser’s first-quarter 2023 results. Precisely, a slow housing market and weakness in the Wood Products segment will depress the company’s quarterly results on a year-over-year basis. Overall, lower lumber and OSB prices are expected to have weighed on Weyerhaeuser’s first-quarter 2023 performance despite operational excellence improvements and disciplined capital allocation moves of the company.
Meanwhile, transportation and resin shortages have been a headwind for the Wood business. Higher raw material costs for OSB web stock, resin and veneer may have also been a pressing concern.
WY expects earnings (before special items) and adjusted EBITDA in the Timberland segment to be slightly higher sequentially for the first quarter. In the West, the company expects fee harvest volumes to be significantly high from the fourth quarter of 2022. Domestic sales realizations are expected to be significantly low owing to lower demand. Per-unit log and haul costs are expected to be moderately lower sequentially. Fee harvest volumes, forestry and road costs and sales realizations in the South and North are expected to be slightly lower.
Meanwhile, in the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings to be $10 million, higher sequentially. Adjusted EBITDA is likely to be $35 million higher than fourth-quarter 2022, thanks to the timing and mix of sales.
Within the Wood Products segment, the company projects earnings and adjusted EBITDA to be moderately high sequentially (excluding the effect of changes in average sales realizations for lumber and oriented strand board).
Other Projections
The Zacks Consensus Estimate for the Wood Products segment (contributing approximately 78% to revenues) revenues is pegged at $1,441 million, implying a decrease from $2,519 million in the year-ago period but an improvement from $1,331 million in the fourth quarter.
The Zacks Consensus Estimate for the Timberland segment (contributing approximately 26% to revenues) revenues is pegged at $529 million, implying a decrease from $626 million in the year-ago period and $548 million in the fourth quarter.
The Zacks Consensus Estimate for the Real Estate, Energy and Natural Resources segment revenues is pegged at $97 million, implying a decline from $128 million a year ago but an increase from $55 million in the prior quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict 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, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, WY has an Earnings ESP of -22.30% and a Zacks Rank #5 (Strong Sell).
Stocks With Favorable Combination
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 on their respective quarters to be reported.
Shares of Trex Company have declined 5.9% in the past year. TREX’s earnings beat the estimates in three of the trailing four quarters and missed once, the average surprise being 7.2%.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.51% and a Zacks Rank #3.
Shares of United Rentals have increased 22% in the past year. URI’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 6.9%.
Owens Corning (OC - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank #3.
Shares of Owens Corning have increased 11.5% in the past year. OC’s earnings beat the consensus mark in each of the trailing four quarters, the average surprise being 12.9%.
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Factors Setting the Tone for Weyerhaeuser's (WY) Q1 Earnings
Weyerhaeuser Company (WY - Free Report) is slated to report first-quarter 2023 results on Apr 27, after the closing bell.
In the last reported quarter, the company’s earnings had surpassed the Zacks Consensus Estimate by 33.3% but net sales missed the same by 3.2%. Quarterly adjusted earnings and net sales for the quarter, however, decreased 51% and 17.4%, respectively.
Weyerhaeuser’s earnings beat the consensus mark in all the last four quarters, with the average surprise being 13.7%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to 15 cents from 17 cents per share over the past seven days. The estimated figure indicates a decrease of 88.6% from the year-ago level. The consensus mark for revenues is $1.90 billion, suggesting a 39.1% year-over-year decline.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote
Factors to Note
Slow construction activities are expected to weigh on Weyerhaeuser’s first-quarter 2023 results. Precisely, a slow housing market and weakness in the Wood Products segment will depress the company’s quarterly results on a year-over-year basis. Overall, lower lumber and OSB prices are expected to have weighed on Weyerhaeuser’s first-quarter 2023 performance despite operational excellence improvements and disciplined capital allocation moves of the company.
Meanwhile, transportation and resin shortages have been a headwind for the Wood business. Higher raw material costs for OSB web stock, resin and veneer may have also been a pressing concern.
WY expects earnings (before special items) and adjusted EBITDA in the Timberland segment to be slightly higher sequentially for the first quarter. In the West, the company expects fee harvest volumes to be significantly high from the fourth quarter of 2022. Domestic sales realizations are expected to be significantly low owing to lower demand. Per-unit log and haul costs are expected to be moderately lower sequentially. Fee harvest volumes, forestry and road costs and sales realizations in the South and North are expected to be slightly lower.
Meanwhile, in the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings to be $10 million, higher sequentially. Adjusted EBITDA is likely to be $35 million higher than fourth-quarter 2022, thanks to the timing and mix of sales.
Within the Wood Products segment, the company projects earnings and adjusted EBITDA to be moderately high sequentially (excluding the effect of changes in average sales realizations for lumber and oriented strand board).
Other Projections
The Zacks Consensus Estimate for the Wood Products segment (contributing approximately 78% to revenues) revenues is pegged at $1,441 million, implying a decrease from $2,519 million in the year-ago period but an improvement from $1,331 million in the fourth quarter.
The Zacks Consensus Estimate for the Timberland segment (contributing approximately 26% to revenues) revenues is pegged at $529 million, implying a decrease from $626 million in the year-ago period and $548 million in the fourth quarter.
The Zacks Consensus Estimate for the Real Estate, Energy and Natural Resources segment revenues is pegged at $97 million, implying a decline from $128 million a year ago but an increase from $55 million in the prior quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict 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, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, WY has an Earnings ESP of -22.30% and a Zacks Rank #5 (Strong Sell).
Stocks With Favorable Combination
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 on their respective quarters to be reported.
Trex Company, Inc. (TREX - Free Report) has an Earnings ESP of +11.34% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Trex Company have declined 5.9% in the past year. TREX’s earnings beat the estimates in three of the trailing four quarters and missed once, the average surprise being 7.2%.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.51% and a Zacks Rank #3.
Shares of United Rentals have increased 22% in the past year. URI’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 6.9%.
Owens Corning (OC - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank #3.
Shares of Owens Corning have increased 11.5% in the past year. OC’s earnings beat the consensus mark in each of the trailing four quarters, the average surprise being 12.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.