Weyerhaeuser Co.'s wood products segment plunged to an operating loss of $61 million in the second quarter from a loss of just $4 million a year earlier and expects weak earnings in the current quarter, the company reported today. Net sales and revenues for the segment dropped 10.3% to $726 million.
Company-wide, Weyerhaeuser's net earnings slipped to $10 million from $14 million in 2010, with sales slipped 1.9% to $1.61 billion.
The Federal Way, Wash.-based company noted that prices for lumber and oriented strand board (OSB) fell in the second quarter from the first, while log costs rose. The segment also recorded $9 million in special charges related to the expected sales of its hardwoods business. Looking ahead, "Weyerhaeuser anticipates a comparable loss from the segment in the third quarter," the company said, adding it "expects lower selling prices for lumber and oriented strand board and lower sales volumes across most product lines, offset by lower log costs and modest cost improvements."
Sales of structural lumber fell 5.8% to $29 million even though sales volume jumped 8.9% to 963 million board feet and production volume climbed 6.7% to 903 million board feet. Engineered solid sectional lumber recorded a 10.1% fall in sales to $71 million though sales volume held steady at 4 million cubic feet and production volume fell by a quarter to 3 million cubic foot.
As for engineered I-joists, sales slipped by just $1 million to total $1 million on a 7.3% drop in sales volume to 38 million lineal feet and an even bigger drop in production volume--17%--to 34 million feet.
OSB sales plunged 23.3% to $89 million despite a 14% increase in sales volume to 498 million square feet (3/8-inch basis). Production rose 10.7% to 518 million square feet.
Meanwhile, sales of softwood plywood dropped 30.4% to $16 million. Sales volume dropped 18.7% to 61 million square feet (3/8-inch basis) and production gave up a quarter to 48 million square feet.