Weyerhaeuser Earnings Fall in First Quarter

Federal Way, WA, May 5, 2009--Weyerhaeuser Co.'s first-quarter loss widened as the slow housing market hindered sales of its lumber and panels.

The lumber products firm posted a net loss of $264 million, or $1.25 cents per share, compared with a loss of $148 million, or 68 cents per share, a year earlier. Excluding one-time charges, the company lost 68 cents per share.

However, excluding costs for mill shutdowns and lower real estate values, results beat Wall Street expectations and Weyerhaeuser expected closings on homes to rise "slightly" in the second quarter, but at lower average prices.

Lumber, pulp and wood products companies are struggling with a 3-year slump in housing. With relatively few homes being built, there is little demand for two-by-fours, plywood decking and other wood products that generate revenue for companies like Weyerhaeuser.

Weyerhaeuser also makes Lyptus wood flooring, and builds homes.

Overall sales fell to $1.28 billion from $2.04 billion.

The loss from homebuilding deepened to $96 million from $74 million in the first quarter of 2008, due to fewer home closings.

"The recession hit us hard," said Dan Fulton, the company's chief executive. "Declining revenues during the quarter reflect reduced volume and depressed prices across all of our product lines."

During the first quarter, the company permanently closed or curtailed 10 wood products mills. That is just over 15 percent of the facilities it was running last year, according to Weyerhaeuser's 2008 annual report, which lists 65 wood products facilities.