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Weyerhaeuser Company’s (WY - Free Report) shares inched up 0.4% in the after-hour trading session on Jan 25, after it reported mixed results for fourth-quarter 2023. Its earnings beat the Zacks Consensus Estimate, but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West and a decrease in domestic sales volumes.
The company optimized its timberlands holdings with the strategic acquisition of mature and highly productive acreage in the Carolinas and Mississippi and the divestiture of less strategic acreage in South Carolina. Also, it captured additional operational excellence improvements, grew its Natural Climate Solutions business and sold first forest carbon credits in the voluntary market.
On an impressive note, the company unveiled a 14-cent per share supplemental dividend on its common stock, which will be paid in cash on Feb 27, 2024, to shareholders of record as of Feb 16.
Inside the Headlines
The company reported adjusted earnings of 16 cents per share, beating the consensus mark of 14 cents by 14.3%. The bottom line, however, decreased 33.3% from the year-ago reported figure of 24 cents per share.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Net sales for the quarter came in at $1,774 million, missing the consensus mark of $1,848 million by 4% and declining 2.7% from $1,823 million reported in the prior-year quarter.
Adjusted EBITDA came in at $321 million, down 13% from $369 million in the year-ago period.
Segment Details
Timberlands: Net sales (including inter-segment sales of $139 million) from the segment came in at $534 million, down from the year-ago figure of $548 million. Adjusted EBITDA came in at $143 million, down from $150 million in the year-ago quarter. Meanwhile, we expected segment sales to decline 9.8% year over year to $494.2 million in the quarter.
Real Estate, Energy and Natural Resources: For the reported quarter, the segment’s net sales amounted to $77 million, up from $55 million a year ago. The reported figure was higher than our expectation of $70.8 million for the quarter. Adjusted EBITDA came in at $67 million, indicating growth from $46 million reported in the year-ago period.
Wood Products: For the fourth quarter, the segment’s sales totaled $1,302 million, down from $1,331 million in the prior-year period. Adjusted EBITDA came in at $159 million, down from $197 million a year ago. We expected segment sales to grow 3.4% year over year to $1,375.8 million in the quarter.
2023 Highlights
For the full year, adjusted earnings came in at $1.02 per share, indicating a decrease of 66.2% from $3.02 reported in 2022. Revenues were $7.67 billion, which declined 24.6% from $10.18 billion reported a year ago.
The adjusted EBITDA of $1.69 billion increased 53.6% from 2022.
Financial Highlights
As of Dec 31, 2023, Weyerhaeuser had cash and cash equivalents of $1.16 billion, down from $1.58 billion at 2022-end. Long-term debt was $5.07 billion at the quarter’s end, up from $4.07 billion at 2022-end.
Net cash from operations was $288 million for the fourth quarter and $1,433 million for 2023 versus $167 million and $2,832 million reported in the respective year-ago period.
Q1 Outlook
For first-quarter 2024, the company expects earnings (before special items) and adjusted EBITDA in the Timberland segment to be comparable sequentially. In the West, it expects fee harvest volumes to be moderately high from the reported quarter as well as per unit log and haul costs to be significantly low. However, sales realizations are expected to be slightly lower due to mix. In the South, WY expects moderately lower fee harvest volumes and comparable sales realizations and per-unit log and haul costs. Forestry and road costs in both the West and South are anticipated to be seasonally down.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings to be comparable sequentially. Adjusted EBITDA is likely to be $15 million higher than fourth-quarter 2023, thanks to the timing and mix of sales.
Within the Wood Products segment, the company predicts earnings and adjusted EBITDA to be slightly high sequentially (excluding the effect of changes in average sales realizations for lumber and oriented strand board). It expects higher sales volumes and slightly lower log costs and unit manufacturing costs in lumber. For oriented strand board, it anticipates a moderate increase in sales volumes, slightly high fiber costs, and lower unit manufacturing costs. For engineered wood products, the company predicts higher sales volumes, lower sales realizations for most products and a decline in raw material costs. WY anticipates improvement in the distribution segment from fourth-quarter 2023.
2024 Guidance
For the year, fee harvest volume is approximately 35.5 million tons, as all three regions are expected to be slightly higher year over year.
The Real Estate, Energy and Natural Resources segment’s adjusted EBITDA is anticipated to be $320 million.
United Rentals, Inc. (URI - Free Report) reported impressive fourth-quarter 2023 results. Its earnings and revenues beat the Zacks Consensus Estimate and increased on a year-over-year basis.
The upside was mainly driven by sustained growth across the business, profitability and returns, underpinned by broad-based activity. Moreover, URI has provided strong guidance for 2024, given the strength of the present market condition and the multi-year tailwinds the company sees across infrastructure, manufacturing and energy and power.
D.R. Horton, Inc. (DHI - Free Report) reported first-quarter fiscal 2024 (ended Dec 31, 2023) results, wherein earnings missed the Zacks Consensus Estimate, but revenues surpassed the same.
On a year-over-year basis, both the top and bottom lines increased. The upside was backed by the supply of both new and existing homes as affordable price points remain limited and robust housing demand supported by favorable demographics amid elevated inflation and mortgage/interest rates.
KB Home (KBH - Free Report) reported better-than-expected results in fourth-quarter fiscal 2023 (ended Nov 30, 2023). Both the earnings and revenues beat the Zacks Consensus Estimate. With this, the company’s earnings and revenues surpassed the consensus mark in the trailing four quarters.
Looking forward to the first quarter and the entirety of 2024, KBH foresees enhanced conditions in the housing market and ongoing positive trends in the supply chain. Leveraging the advantages of its Built to Order model, which provides buyers with choices, flexibility and affordability, the company is confident in its ability to effectively navigate potential fluctuations in housing market conditions.
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Weyerhaeuser (WY) Q4 Earnings Beat, Adjusted EBITDA Declines
Weyerhaeuser Company’s (WY - Free Report) shares inched up 0.4% in the after-hour trading session on Jan 25, after it reported mixed results for fourth-quarter 2023. Its earnings beat the Zacks Consensus Estimate, but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West and a decrease in domestic sales volumes.
The company optimized its timberlands holdings with the strategic acquisition of mature and highly productive acreage in the Carolinas and Mississippi and the divestiture of less strategic acreage in South Carolina. Also, it captured additional operational excellence improvements, grew its Natural Climate Solutions business and sold first forest carbon credits in the voluntary market.
On an impressive note, the company unveiled a 14-cent per share supplemental dividend on its common stock, which will be paid in cash on Feb 27, 2024, to shareholders of record as of Feb 16.
Inside the Headlines
The company reported adjusted earnings of 16 cents per share, beating the consensus mark of 14 cents by 14.3%. The bottom line, however, decreased 33.3% from the year-ago reported figure of 24 cents per share.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote
Net sales for the quarter came in at $1,774 million, missing the consensus mark of $1,848 million by 4% and declining 2.7% from $1,823 million reported in the prior-year quarter.
Adjusted EBITDA came in at $321 million, down 13% from $369 million in the year-ago period.
Segment Details
Timberlands: Net sales (including inter-segment sales of $139 million) from the segment came in at $534 million, down from the year-ago figure of $548 million. Adjusted EBITDA came in at $143 million, down from $150 million in the year-ago quarter. Meanwhile, we expected segment sales to decline 9.8% year over year to $494.2 million in the quarter.
Real Estate, Energy and Natural Resources: For the reported quarter, the segment’s net sales amounted to $77 million, up from $55 million a year ago. The reported figure was higher than our expectation of $70.8 million for the quarter. Adjusted EBITDA came in at $67 million, indicating growth from $46 million reported in the year-ago period.
Wood Products: For the fourth quarter, the segment’s sales totaled $1,302 million, down from $1,331 million in the prior-year period. Adjusted EBITDA came in at $159 million, down from $197 million a year ago. We expected segment sales to grow 3.4% year over year to $1,375.8 million in the quarter.
2023 Highlights
For the full year, adjusted earnings came in at $1.02 per share, indicating a decrease of 66.2% from $3.02 reported in 2022. Revenues were $7.67 billion, which declined 24.6% from $10.18 billion reported a year ago.
The adjusted EBITDA of $1.69 billion increased 53.6% from 2022.
Financial Highlights
As of Dec 31, 2023, Weyerhaeuser had cash and cash equivalents of $1.16 billion, down from $1.58 billion at 2022-end. Long-term debt was $5.07 billion at the quarter’s end, up from $4.07 billion at 2022-end.
Net cash from operations was $288 million for the fourth quarter and $1,433 million for 2023 versus $167 million and $2,832 million reported in the respective year-ago period.
Q1 Outlook
For first-quarter 2024, the company expects earnings (before special items) and adjusted EBITDA in the Timberland segment to be comparable sequentially. In the West, it expects fee harvest volumes to be moderately high from the reported quarter as well as per unit log and haul costs to be significantly low. However, sales realizations are expected to be slightly lower due to mix. In the South, WY expects moderately lower fee harvest volumes and comparable sales realizations and per-unit log and haul costs. Forestry and road costs in both the West and South are anticipated to be seasonally down.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings to be comparable sequentially. Adjusted EBITDA is likely to be $15 million higher than fourth-quarter 2023, thanks to the timing and mix of sales.
Within the Wood Products segment, the company predicts earnings and adjusted EBITDA to be slightly high sequentially (excluding the effect of changes in average sales realizations for lumber and oriented strand board). It expects higher sales volumes and slightly lower log costs and unit manufacturing costs in lumber. For oriented strand board, it anticipates a moderate increase in sales volumes, slightly high fiber costs, and lower unit manufacturing costs. For engineered wood products, the company predicts higher sales volumes, lower sales realizations for most products and a decline in raw material costs. WY anticipates improvement in the distribution segment from fourth-quarter 2023.
2024 Guidance
For the year, fee harvest volume is approximately 35.5 million tons, as all three regions are expected to be slightly higher year over year.
The Real Estate, Energy and Natural Resources segment’s adjusted EBITDA is anticipated to be $320 million.
Zacks Rank
Currently, WY carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
A Few Recent Construction Releases
United Rentals, Inc. (URI - Free Report) reported impressive fourth-quarter 2023 results. Its earnings and revenues beat the Zacks Consensus Estimate and increased on a year-over-year basis.
The upside was mainly driven by sustained growth across the business, profitability and returns, underpinned by broad-based activity. Moreover, URI has provided strong guidance for 2024, given the strength of the present market condition and the multi-year tailwinds the company sees across infrastructure, manufacturing and energy and power.
D.R. Horton, Inc. (DHI - Free Report) reported first-quarter fiscal 2024 (ended Dec 31, 2023) results, wherein earnings missed the Zacks Consensus Estimate, but revenues surpassed the same.
On a year-over-year basis, both the top and bottom lines increased. The upside was backed by the supply of both new and existing homes as affordable price points remain limited and robust housing demand supported by favorable demographics amid elevated inflation and mortgage/interest rates.
KB Home (KBH - Free Report) reported better-than-expected results in fourth-quarter fiscal 2023 (ended Nov 30, 2023). Both the earnings and revenues beat the Zacks Consensus Estimate. With this, the company’s earnings and revenues surpassed the consensus mark in the trailing four quarters.
Looking forward to the first quarter and the entirety of 2024, KBH foresees enhanced conditions in the housing market and ongoing positive trends in the supply chain. Leveraging the advantages of its Built to Order model, which provides buyers with choices, flexibility and affordability, the company is confident in its ability to effectively navigate potential fluctuations in housing market conditions.