Weyerhaeuser today reported full-year 2013 net earnings of $540 million, a 40% increase over 2012 net earnings of $385 million. Sales for the year topped out at $8.5 billion, compared to $7.1 billion the year before, an increase of nearly 20%.
In the final quarter of 2013, Weyerhaeuser’s net earnings came to $43 million, compared to $157 million in the third quarter. Net sales in the quarter totaled $2.26 billion, versus $2.18 billion in the third quarter.
“We doubled earnings before special items, increased our per share dividend by nearly 30%, announced an agreement to combine our real estate operation with TRI Pointe Homes, and acquired approximately 645,000 acres of outstanding timberlands in the Pacific Northwest through the purchase of Longview Timber,” said president and CEO Doyle Simons. “As 2014 begins, we are relentlessly focused on driving operational excellence to fully capitalize on improving markets and deliver value to our shareholders.”
Timberland Results
The Federal Way, Wash.-based company’s timberlands division had net sales of $364 million in the fourth quarter of 2013, a 3% increase over third quarter sales of $353 million, as construction markets in China drove both increased demand and selling prices for Western logs.
The company said Western fee harvest volumes rose due to the increased demand and a full quarter of harvest from the Longview Timber acquisition. Weyerhaeuser’s average log price realizations were comparable to third quarter due to a shift in export mix and a greater proportion of domestic volume. These factors were partially offset by seasonally higher road and silviculture costs.
In the coming year, Weyerhaeuser expects significantly higher earnings from the timberlands segment in the first quarter. In the West, the company anticipates improved selling prices and volumes due to increasing export demand, and road and silviculture costs should decline seasonally. In the South, the company anticipates seasonally lower fee harvest volumes and higher silviculture costs, partially offset by slightly higher pulpwood realizations.
Wood Products
The wood products division had fourth quarter 2013 net sales of $926 million, down 10 % from third quarter net sales of $1.03 billion, due to unusually severe winter weather with depressed sales volumes across all product lines. Seasonally lower oriented strand board prices were offset by higher average selling prices for lumber and engineered wood products. Log costs increased, primarily in the West, and production fell due to seasonally lower demand, severe cold weather, and planned downtime for capital projects.
Weyerhaeuser’s first quarter 2014 outlook anticipates higher earnings from the wood products segment, with higher average selling prices for lumber, seasonally higher sales volumes across most product lines, and improved operating rates, partially offset by higher log costs and the effect of abnormally adverse weather.
Cellulose Fibers
Fourth quarter 2013 cellulose fibers net sales rose to $488 million, a 51% increase over third quarter net sales of $324 million. Average selling prices for pulp improved, maintenance expense declined, and productivity increased due to fewer days of scheduled annual maintenance outages. However, those factors were partially offset by higher fiber costs and lower liquid packing board realizations due to mix.
Weyerhaeuser expects lower earnings from the segment in the first quarter of 2014, as well as slightly lower pulp sales volumes, increased maintenance expense, and higher fiber and labor costs, partially offset by improved liquid packaging board realizations due to mix.
