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Weyerhaeuser Boosts Core Business with North Pacific Sale

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Forest product manufacturer and supplier Weyerhaeuser Company (WY - Free Report) recently announced that it has successfully completed the sale of its printing papers company, North Pacific Paper Company to One Rock Capital Partners, LLC. Financial terms of the deal were not disclosed.

As revealed, Weyerhaeuser’s divested assets included its Longview, WA-based papers mill, which it operated in collaboration with Nippon Paper Industries Co., Ltd. The company owned a 50% interest in this joint venture, which is primarily engaged in producing high-brightness publication papers and newsprint.

Weyerhaeuser intends to use majority of the after-tax proceeds to repay its debts.

Weyerhaeuser’s divestment of its printing papers business marks the end of the strategic review of its previous business segment, Cellulose Fibers, now treated as a discontinued item. In August, the company completed divesting its liquid packaging board business to Nippon Paper Industries Co., Ltd. for $285 million in cash while in May, it agreed to sell its Cellulose Fibers pulp mills for approximately $2.2 billion in cash to International Paper Company (IP - Free Report) . Subject to closing conditions, the divestment of Cellulose Fibers pulp mills will be completed in fourth-quarter 2016.

We believe that the above-mentioned dispositions will enable Weyerhaeuser to concentrate on its core timber, land, and forest products business and hence, improve its profitability in the quarters ahead.

WEYERHAEUSER CO Price and Consensus

 

WEYERHAEUSER CO Price and Consensus | WEYERHAEUSER CO Quote

Zacks Rank & Stocks to Consider

With a market capitalization of $22 billion, Weyerhaeuser currently carries a Zacks Rank #3 (Buy). Some better-ranked stocks in the same industry include Norbord, Inc. and Louisiana-Pacific Corp. (LPX - Free Report) . While Norbord, Inc. sports a Zacks Rank #1 (Strong Buy), Louisiana-Pacific carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Norbord has an average earnings surprise of 99.98%, while earnings estimates for 2016 and 2017 have been revised upward over the last 60 days.

Louisiana-Pacific Corp.’s financial performance has been impressive, with an average positive earnings surprise of 98.51% for the last four quarters. Also, earnings estimates for 2016 and 2017 have been revised upward over the last 60 days.

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