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Weyerhaeuser (WY) Q3 Earnings Meet, Sales Miss, Both Fall Y/Y
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Weyerhaeuser Company (WY - Free Report) reported third-quarter 2023 results, wherein its earnings met the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines declined on a year-over-year basis.
WY’s shares gained 1.4% during the trading session but were down 0.3% in the after-hours trading session on Oct 26.
Lower harvest volumes, mainly in the West and the South, lower sales realizations, lower export sales volumes along with temporary operational disruptions led to the downside.
Weyerhaeuser Company Price, Consensus and EPS Surprise
The company’s earnings per share (EPS) of 33 cents met the consensus mark but decreased 21.4% from the year-ago reported figure of 42 cents.
Net sales for the quarter were $2,022 million, missing the consensus mark of $2,115 million by 4.4% and declining 11.2% from the $2,276 million reported in the prior-year quarter. Net sales, however, grew 1.3% sequentially.
Adjusted EBITDA came in at $509 million, down from $583 million in the year-ago period but an improvement from $469 million in the second quarter of 2023.
Segment Details
Timberlands: Net sales (including inter-segment sales of $141 million) from the segment was $521 million, down from the year-ago figure of $574 million. Meanwhile, we expected segment sales to decline 5.5% year over year to $542.4 million in the quarter.
Adjusted EBITDA came in at $143 million, down from $168 million in the year-ago quarter.
Real Estate, Energy and Natural Resources: For the reported quarter, the segment’s net sales amounted to $105 million, up from $68 million a year ago. The reported figure was higher than our expectation of $91.6 million for the quarter.
Adjusted EBITDA came in at $94 million, reflecting an increase from $60 million reported in the year-ago level.
Wood Products: For the third quarter, segment sales totaled $1,537 million, down from $1,767 million in the prior-year period. We expected segment sales to decline 9.4% year over year to $1,601.2 million in the quarter.
Adjusted EBITDA came in at $328 million, significantly down from $395 million a year ago.
Financial Highlights
As of Sep 30, 2023, Weyerhaeuser had cash and cash equivalents of $1,173 million, down from $1,581 million at 2022-end but up from $1,095 million at June 2023-end. Long-term debt was $4,818 million at the third-quarter end, up from $4,071 million at 2022-end and from $4,817 million at June 2023-end.
Net cash from operations was $523 million in the third quarter, down from $562 million a year ago but up from $496 million in the prior quarter.
Q4 Outlook
For the Timberland segment, the company expects earnings (before special items) and adjusted EBITDA to be comparable sequentially. In the western region, the company anticipates that fee harvest volumes, sales prices, and forestry and road expenses will show similar performance compared with the prior quarter. However, per-unit log and haul costs are expected to be slightly elevated. In the southern region, the company foresees that fee harvest volumes, sales prices, and per-unit log and haul costs will remain consistent with those in the third quarter. Nevertheless, forestry and road expenses are projected to be somewhat reduced.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings and adjusted EBITDA to be lower in the third quarter, thanks to the timing and mix of sales. The company now expects 2023 adjusted EBITDA of approximately $310 million but still expects basis as a percentage of real estate sales to be 35% to 40% for the year.
Within the Wood Products segment, Weyerhaeuser projects fourth-quarter earnings and adjusted EBITDA to be moderately lower than the third quarter. Regarding lumber, the company foresees a moderate increase in sales volumes, while log costs are expected to remain at a similar level, and unit manufacturing costs are projected to be slightly reduced sequentially. As for oriented strand board or OSB, the company anticipates a moderate uptick in sales volumes, with slightly higher fiber costs but slightly lower unit manufacturing costs compared with the prior quarter.
In the case of engineered wood products or EWP, lower sales realizations are expected, with slightly higher raw material costs and a slight reduction in sales volumes, particularly for solid-section products. For distribution, the company foresees weaker results in comparison to the third quarter, mainly due to a decrease in commodity prices.
Vulcan Materials Company (VMC - Free Report) reported stellar results for the third quarter of 2023, surpassing the Zacks Consensus Estimate for both earnings and revenues.
VMC’s adjusted EPS of $2.29 increased 28.7% from the year-ago level of $1.78. Total revenues of $2,185.8 million increased 4.7% year over year.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in third-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. Its quarterly results reflected 12 consecutive quarters of organic sales growth and solid operating margin expansion, contributing to high-teens adjusted EPS growth.
OTIS reported quarterly EPS of 95 cents, increasing 18.8% from the year-ago quarter’s figure of 80 cents. Net sales of $3.52 billion rose 5.4% on a year-over-year basis.
United Rentals, Inc.’s (URI - Free Report) third-quarter 2023 earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, earnings and revenues increased courtesy of sustained growth across the business, profitability and returns, underpinned by broad-based activity.
URI’s adjusted EPS of $11.73 increased 26.5% from the prior-year figure of $9.27 per share. Total revenues of $3.77 billion grew 23.4% year over year.
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Weyerhaeuser (WY) Q3 Earnings Meet, Sales Miss, Both Fall Y/Y
Weyerhaeuser Company (WY - Free Report) reported third-quarter 2023 results, wherein its earnings met the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines declined on a year-over-year basis.
WY’s shares gained 1.4% during the trading session but were down 0.3% in the after-hours trading session on Oct 26.
Lower harvest volumes, mainly in the West and the South, lower sales realizations, lower export sales volumes along with temporary operational disruptions led to the downside.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote
Inside the Headlines
The company’s earnings per share (EPS) of 33 cents met the consensus mark but decreased 21.4% from the year-ago reported figure of 42 cents.
Net sales for the quarter were $2,022 million, missing the consensus mark of $2,115 million by 4.4% and declining 11.2% from the $2,276 million reported in the prior-year quarter. Net sales, however, grew 1.3% sequentially.
Adjusted EBITDA came in at $509 million, down from $583 million in the year-ago period but an improvement from $469 million in the second quarter of 2023.
Segment Details
Timberlands: Net sales (including inter-segment sales of $141 million) from the segment was $521 million, down from the year-ago figure of $574 million. Meanwhile, we expected segment sales to decline 5.5% year over year to $542.4 million in the quarter.
Adjusted EBITDA came in at $143 million, down from $168 million in the year-ago quarter.
Real Estate, Energy and Natural Resources: For the reported quarter, the segment’s net sales amounted to $105 million, up from $68 million a year ago. The reported figure was higher than our expectation of $91.6 million for the quarter.
Adjusted EBITDA came in at $94 million, reflecting an increase from $60 million reported in the year-ago level.
Wood Products: For the third quarter, segment sales totaled $1,537 million, down from $1,767 million in the prior-year period. We expected segment sales to decline 9.4% year over year to $1,601.2 million in the quarter.
Adjusted EBITDA came in at $328 million, significantly down from $395 million a year ago.
Financial Highlights
As of Sep 30, 2023, Weyerhaeuser had cash and cash equivalents of $1,173 million, down from $1,581 million at 2022-end but up from $1,095 million at June 2023-end. Long-term debt was $4,818 million at the third-quarter end, up from $4,071 million at 2022-end and from $4,817 million at June 2023-end.
Net cash from operations was $523 million in the third quarter, down from $562 million a year ago but up from $496 million in the prior quarter.
Q4 Outlook
For the Timberland segment, the company expects earnings (before special items) and adjusted EBITDA to be comparable sequentially. In the western region, the company anticipates that fee harvest volumes, sales prices, and forestry and road expenses will show similar performance compared with the prior quarter. However, per-unit log and haul costs are expected to be slightly elevated. In the southern region, the company foresees that fee harvest volumes, sales prices, and per-unit log and haul costs will remain consistent with those in the third quarter. Nevertheless, forestry and road expenses are projected to be somewhat reduced.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings and adjusted EBITDA to be lower in the third quarter, thanks to the timing and mix of sales. The company now expects 2023 adjusted EBITDA of approximately $310 million but still expects basis as a percentage of real estate sales to be 35% to 40% for the year.
Within the Wood Products segment, Weyerhaeuser projects fourth-quarter earnings and adjusted EBITDA to be moderately lower than the third quarter. Regarding lumber, the company foresees a moderate increase in sales volumes, while log costs are expected to remain at a similar level, and unit manufacturing costs are projected to be slightly reduced sequentially. As for oriented strand board or OSB, the company anticipates a moderate uptick in sales volumes, with slightly higher fiber costs but slightly lower unit manufacturing costs compared with the prior quarter.
In the case of engineered wood products or EWP, lower sales realizations are expected, with slightly higher raw material costs and a slight reduction in sales volumes, particularly for solid-section products. For distribution, the company foresees weaker results in comparison to the third quarter, mainly due to a decrease in commodity prices.
Zacks Rank
Currently, WY sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Vulcan Materials Company (VMC - Free Report) reported stellar results for the third quarter of 2023, surpassing the Zacks Consensus Estimate for both earnings and revenues.
VMC’s adjusted EPS of $2.29 increased 28.7% from the year-ago level of $1.78. Total revenues of $2,185.8 million increased 4.7% year over year.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in third-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. Its quarterly results reflected 12 consecutive quarters of organic sales growth and solid operating margin expansion, contributing to high-teens adjusted EPS growth.
OTIS reported quarterly EPS of 95 cents, increasing 18.8% from the year-ago quarter’s figure of 80 cents. Net sales of $3.52 billion rose 5.4% on a year-over-year basis.
United Rentals, Inc.’s (URI - Free Report) third-quarter 2023 earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, earnings and revenues increased courtesy of sustained growth across the business, profitability and returns, underpinned by broad-based activity.
URI’s adjusted EPS of $11.73 increased 26.5% from the prior-year figure of $9.27 per share. Total revenues of $3.77 billion grew 23.4% year over year.