Weyerhaeuser Co.'s wood products unit shrank its pretax loss to just $19 million in the first quarter from a $266 million loss a year earlier, and it's likely the segment will turn a profit this quarter, the company reported today.
Wood products sales rose 11.4% in the first quarter to $604 million even though the volume of wood products sold to third parties declined 7%. The net sales and third-party sales volumes by product:
- Structural lumber sales climbed 13.7% to $241 million. Volume fell 13.6% to 761 million board feet.
- Engineered solids sale rose 20% to $66 million on a 33% climb in volume to 4 million cubic feet.
- Oriented strand board sales also went up 20% to $66 million in sales even though volume slipped 0.9% to 334 million square feet (3/8-inch equivalent).
- Engineered I-joists sales jumped 39.4% to $48 million on a 69% climb in volume to 44 million lineal feet.
- Softwood plywood sales grew 14.3% to $16 million as volume jumped 17.6% to 60 million square feet (3/8-inch equivalent).
- Hardwood lumber sales added 5.9% to $54 million. Volume grew 15.5% to 67 million board feet.
The only areas where sales declined were in the "other" category and in other products purchased for resale.
"Lumber and oriented strand board sales realizations increased substantially, and operating rates improved," the Federal Way, Wash.-based conglomerate said. "These improvements were partially offset by higher log costs." It based its forecast for a profitable second quarter on "improved operating rates, sales realizations and volumes, partially offset by higher log costs."
Several notes in the financial statement helped explain the dramatic shrinkage in the pretax unit's loss from 2009's first quarter. In January through March 2009, Weyerhaeuser booked $90 million worth of charges for restructuring and closures, asset impairments, goodwill impairments, and reserves for litigation. It didn't have to do any of that in 2010's first quarter. Rather, it recorded a $40 million gain on the sale of property and another $4 million gain on the sale of some operations.