Seattle, WA, Jan. 23--Weyerhaeuser Co. had fourth quarter profits of $126 million, or 57 cents a share, compared to a loss of $15 million or 7 cents a share, for the same period a year ago. Sales totalled $4.7 billion, a 39% increase over last year's $3.4 billion in revenue.
Excluding one time costs and gains, the company posted a profit of $88 million, or 41 cents a share. Analysts polled by Thomson First Call had been expecting earnings of 26 cents a share on revenue of $4.7 billion.
The one time events the company cited included gains from selling timberlands in Washington state and insurance payments related to a boiler explosion at the firm's Plymouth, North Carolina, paper plant last year. They also include costs associated with ending a pension plan offered by Willamette Industries, which the firm acquired early in 2002.
Weyerhaeuser also paid about $26 million in duties related to an ongoing dispute between the U.S. and Canada over importing Canadian softwood lumber.
Steven Rogel, Weyerhaeuser's chairman and chief executive, credited strength in the company's pulp and paper division; containerboard, packaging and recycling business; and its real estate division for helping drive the quarter. But the company's wood products division, hit by an oversupply and low prices, helped drag down results.
In its outlook for the current quarter, the company warned of continuing problems with the wood products business, and higher maintenance costs expected for its containerboard mills.
Rogel also warned that its real estate business may not see as big a boost in spring construction as it typically would.
"Business conditions have been more difficult than we anticipated early last year," Rogel said. "Nonetheless, we stayed the course and we’re achieving our goals."
In the coming year, Weyerhaeuser expects to take a $20 million non-cash charge related to poor performance of pension fund investments. It also plans to work with U.S. and Canadian governments to encourage a resolution of their dispute over the amount the Canadian government charges its producers for cutting trees and the U.S. duties levied in response. Weyerhaeuser, which has major holdings in Canada, paid $64 million in duties for Canadian softwood imports last year.
Considering the economic conditions, Weyerhaeuser performed well, said Dan Nelson, an analyst with Ragen MacKenzie, a Seattle based investment firm.
"On all fronts, they had a pretty solid quarter," he said, although he added, "it's still below what these guys would be earning in a good economic environment."
Early in the year, Weyerhaeuser acquired Portland, Oregon based Willamette and has since focused on closing select mills, blending the two operations, reducing capital spending and paying down debt. Weyerhaeuser also is in the midst of cutting more than 1,000 jobs through layoffs and attrition, with the reductions continuing into 2004.
For the year, Weyerhaeuser reported a profit of $241 million, or $1.09 a share, down 32% from the previous year, when it posted a profit of $354 million or $1.61 a share. The company's revenue increased to $18.5 billion, up 27% from the previous year's $14.5 billion.
Analysts had projected earnings of $1.04 per share on sales of $18.3 billion.
