Weyerhaeuser’s wood-products segment recorded its strongest performance since 2005 as rising lumber and OSB prices and an increase in housing starts pushed segment earnings to $178 million during the first quarter from a loss of $13 million a year earlier as sales rose nearly 56% to $988 million for the same period. OSB production increased 10.1% to 662 million square feet from a year earlier as prices jumped 24% for the period. Structural lumber production rose 6.6% to 1,021 billion board feet on a 20% price spike from the first quarter of 2012. Company officials told analysts in a call April 26 that lumber and OSB facilities operated at approximately 90% capacity during the quarter while engineered wood operated at 40% capacity, including two curtailed facilities. CEO Dan Fulton told analysts to continue to expect higher prices and a lag time in realizing demand due to a thin channel and latency in supply gains from bringing facilities back online or increasing their production levels. “There will be supply that will come online to meet demand, but I think supply response is delayed and trying to keep up with demand,” he said.
West Fraser attributed strong EBITDA growth in its lumber segment to steadily rising wood-product prices and a recovering U.S. housing market, saying in a statement April 26 that the company remains “cautiously optimistic” in forecasting continued growth across its product categories. Riding on that optimism, the company’s lumber business posted $146 million Canadian dollars ($143.1 million) in EBITDA, recovering from a CA$7 million loss a year earlier, as sales jumped nearly 53% to CA$579 million for the same period. Plywood, LVL, and MDF panels reported EBITDA of CA$18 million, compared to CA$5 million in the first quarter of 2012, on an 11.6% sales gain to CA$115 million for the period.
Simpson Manufacturing, parent of fastener-maker Simpson Strong-Tie, credited inclement weather, lower selling prices, and higher material and distribution costs for a 5% drop in its first-quarter North American gross profit from a year earlier to $57.1 million on sales of $127.7 million, flat for the same period. Simpson’s wood-construction product sales fell 4% to $132.8 million from the first quarter of 2012, a decrease the company in a statement April 25 attributed to a drop in home-center sales and no change in sales to independent dealers.
More earnings news: L&W Supply, Boise Cascade, Universal Forest Products, and Owens Corning.