Weyerhaeuser's wood products segment swung to an operating profit of $36 million in the second quarter from a $54 million loss in the year-earlier period, the company reported today. Segment sales shot up 27% of $796 million thanks to both volume and price increases.
The numbers also shown in comparison with 2012's first quarter, in which the wood products segment recorded a $14 million loss on sales of $654 million. Gross margin shot up to $88 million in the April-June period from a negative $4 million a year earlier and a positive $43 million in this year's opening three months.
A statement by the Federal Way, Wash.-based company said the positive news was "primarily due to higher selling prices for lumber and oriented strand board and operational improvements. Lumber prices increased 13%, and prices for oriented strand board improved 9%. Sales volumes increased substantially. However, the company forecast lower earnings from the segment in the third quarter, with sales volumes holding steady and lumber prices making their usual seasonal decline.
Net sales and revenue from structural lumber climbed $27.5% to $370 million from 2011's second quarter, while engineered lumber sales rose 9.4% to $70 million, sales of engineered I-joists added just $1 million to reach $49 million, and oriented strand board (OSB) sales leaped 37.7% to hit $138 million. Volumes rose 11.2% for structural lumber, 21.9% for engineered solid-section wood, 5% for engineered I-joists, and 32.9% for OSB.
Company-wide, Weyerhaeuser posted net earnings of $84 million for the quarter on sales of $1.8 billion. "We are seeing signs of a rebound in the U.S. housing market, and as markets strengthen, the operational improvements within our wood products business are yielding clear results," said Dan Fulton, the company's president and chief executive officer.