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Weyerhaeuser Company (WY - Free Report) reported first-quarter 2020 results, wherein earnings and revenues surpassed the respective the Zacks Consensus Estimate. The company reported adjusted earnings of 18 cents per share, which beat the consensus mark of 14 cents by 28.6% and increased 63.6% from the year-ago figure of 11 cents.
Net sales during the quarter amounted to $1,728 million, beating the consensus mark of $1,670 million by 3.5%. The reported figure also grew 5.2% from $1,643 million reported in the prior-year quarter on the back of growth of the Wood Products segment.
Weyerhaeuser Company Price, Consensus and EPS Surprise
The company currently operates through three business segments — Timberlands; Real Estate, Energy and Natural Resources; and Wood Products.
Timberlands’ net sales (including inter-segment sales of $122 million) during the quarter came in at $503 million, down 9.5% from the year-ago figure of $556 million. Higher average domestic sales realizations, and increased average sales realizations and volumes for Japan export logs in the West were offset by lower fee harvest volumes and average log sales realizations in the South.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $173 million, down 10.4% from $193 million in the year-ago quarter.
Net sales in Real Estate, Energy and Natural Resources amounted to $112 million, down 5.1% from $118 million reported in the prior-year quarter owing to higher number of acres sold. Adjusted EBITDA also fell 4.7% to $101 million from $106 million in the year-ago quarter.
Sales in the Wood Products segment totaled $1,235 million, up 12.9% from $1,094 million in the prior-year quarter. Adjusted EBITDA came in at $184 million, up 60% from the year-ago figure of $115 million. The improvement was due to increased average sales realizations for lumber and oriented strand board, as well as higher sales volumes across all product lines.
Operating Highlights
Adjusted EBITDA was $413 million in the quarter, up 13.2% from $365 million in the year-ago period.
Financial Highlights
As of Mar 31, 2020, Weyerhaeuser had cash and cash equivalents of $1,458 million, up from $139 million at 2019-end. Long-term debt was $6,299 million at the end of the quarter versus $6,147 million at 2019-end.
Net cash from operations was $86 million at the end of the quarter versus $14 million cash used in operations.
Q2 Outlook
For the second quarter, the company expects sequentially lower earnings and adjusted EBITDA in the Timberland segment.
Geographically, in the West, the company expects lower realizations, comparable domestic log sales volumes, and seasonally higher road and forestry costs to be partially offset by higher sales volumes for China export logs. In the South, the company anticipates lower fee harvest volumes and slightly lower average log sales realizations.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser anticipates earnings and adjusted EBITDA to decline $20 million from a year ago due to fewer real estate acres sold.
In the Wood Products segment, the company predicts earnings and adjusted EBITDA to be significantly down on a sequential as well year-over-year basis. It anticipates significantly lower sales volumes across all product lines.
Zacks Rank & Key Picks
Weyerhaeuser — which shares space with PotlatchDeltic Corporation (PCH - Free Report) , Trex Company, Inc. (TREX - Free Report) and Universal Forest Products, Inc. (UFPI - Free Report) in the Zacks Building Products - Wood industry — currently carries a Zacks Rank #4 (Sell).
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Weyerhaeuser's (WY) Q1 Earnings & Revenues Surpass Estimates
Weyerhaeuser Company (WY - Free Report) reported first-quarter 2020 results, wherein earnings and revenues surpassed the respective the Zacks Consensus Estimate. The company reported adjusted earnings of 18 cents per share, which beat the consensus mark of 14 cents by 28.6% and increased 63.6% from the year-ago figure of 11 cents.
Net sales during the quarter amounted to $1,728 million, beating the consensus mark of $1,670 million by 3.5%. The reported figure also grew 5.2% from $1,643 million reported in the prior-year quarter on the back of growth of the Wood Products segment.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote
Segments Details
The company currently operates through three business segments — Timberlands; Real Estate, Energy and Natural Resources; and Wood Products.
Timberlands’ net sales (including inter-segment sales of $122 million) during the quarter came in at $503 million, down 9.5% from the year-ago figure of $556 million. Higher average domestic sales realizations, and increased average sales realizations and volumes for Japan export logs in the West were offset by lower fee harvest volumes and average log sales realizations in the South.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $173 million, down 10.4% from $193 million in the year-ago quarter.
Net sales in Real Estate, Energy and Natural Resources amounted to $112 million, down 5.1% from $118 million reported in the prior-year quarter owing to higher number of acres sold. Adjusted EBITDA also fell 4.7% to $101 million from $106 million in the year-ago quarter.
Sales in the Wood Products segment totaled $1,235 million, up 12.9% from $1,094 million in the prior-year quarter. Adjusted EBITDA came in at $184 million, up 60% from the year-ago figure of $115 million. The improvement was due to increased average sales realizations for lumber and oriented strand board, as well as higher sales volumes across all product lines.
Operating Highlights
Adjusted EBITDA was $413 million in the quarter, up 13.2% from $365 million in the year-ago period.
Financial Highlights
As of Mar 31, 2020, Weyerhaeuser had cash and cash equivalents of $1,458 million, up from $139 million at 2019-end. Long-term debt was $6,299 million at the end of the quarter versus $6,147 million at 2019-end.
Net cash from operations was $86 million at the end of the quarter versus $14 million cash used in operations.
Q2 Outlook
For the second quarter, the company expects sequentially lower earnings and adjusted EBITDA in the Timberland segment.
Geographically, in the West, the company expects lower realizations, comparable domestic log sales volumes, and seasonally higher road and forestry costs to be partially offset by higher sales volumes for China export logs. In the South, the company anticipates lower fee harvest volumes and slightly lower average log sales realizations.
In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser anticipates earnings and adjusted EBITDA to decline $20 million from a year ago due to fewer real estate acres sold.
In the Wood Products segment, the company predicts earnings and adjusted EBITDA to be significantly down on a sequential as well year-over-year basis. It anticipates significantly lower sales volumes across all product lines.
Zacks Rank & Key Picks
Weyerhaeuser — which shares space with PotlatchDeltic Corporation (PCH - Free Report) , Trex Company, Inc. (TREX - Free Report) and Universal Forest Products, Inc. (UFPI - Free Report) in the Zacks Building Products - Wood industry — currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>