Weyerhaeuser's (WY) Q2 Earnings & Revenues Top, Decline Y/Y

Weyerhaeuser Company WY reported second-quarter 2022 results, wherein earnings and revenues beat the Zacks Consensus Estimate but decreased from the year-ago period.

The quarter performance reflects lower fee harvest volumes due to unseasonably wet weather, higher fuel-related costs, lower sales realizations for lumber and oriented strand board (OSB) and higher raw material costs, primarily for OSB webstock.

Looking forward, Devin W. Stockfish, president and chief executive officer of Weyerhaeuser, said, “we remain constructive on long-term demand fundamentals that support our businesses, notwithstanding the recent macroeconomic headwinds. Our financial position is exceptionally strong, and we remain committed to delivering operational excellence across our unmatched portfolio of assets and enhancing shareholder value through disciplined capital allocation.”

Weyerhaeuser Company Price, Consensus and EPS Surprise

Weyerhaeuser Company Price, Consensus and EPS Surprise

Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote

Inside the Headlines

For the second quarter, the company reported adjusted earnings of $1.06 per share, beating the consensus mark of $1.02 by 3.9%. The bottom line, however, decreased 22.6% from the year-ago adjusted figure of $1.37 per share.

Net sales for the quarter came in at $2,973 million, surpassing the consensus mark of $2,804 million by 6%. The figure, however, decreased 5.4% from $3,144 million reported in the prior-year quarter.

Adjusted EBITDA came in at $1,205 million, down from $1,573 million in the year-ago period.

Segment Details

Timberlands: Net sales (including inter-segment sales of $156 million) from the segment came in at $671 million, up 24% from the year-ago figure of $541 million. Adjusted EBITDA came in at $219 million, up from $180 million in the year-ago quarter.

Real Estate, Energy and Natural Resources: For the second quarter, the segment’s net sales amounted to $117 million, up from $110 million a year ago. Adjusted EBITDA came in at $107 million, reflecting an increase from $91 million a year ago.

Wood Products: For the third quarter, segment sales totaled $2,341 million, down 11% from $2,629 million in the prior-year period. Adjusted EBITDA came in at $912 million, down from $1,386 million a year ago.

Financial Highlights

As of Jun 30, 2022, Weyerhaeuser had cash and cash equivalents of $1.72 billion, down from $1.88 billion at 2021-end. Long-term debt was $5.053 billion at quarter-end, down from $5.099 billion at 2021-end.

Net cash from operations was $1,146 million for second-quarter 2022, down from $1,308 million in the year-ago period.

Outlook

For third-quarter 2022, the company expects earnings (before special items) and adjusted EBITDA in the Timberland segment to be lower sequentially but higher from the year-ago period. In the West, the company expects fee harvest volumes to be comparable from the second quarter and expects significantly lower sales volumes due to export. Sales realizations are expected to be moderately lower, and per unit log and haul costs are expected to be lower sequentially. In the South, the company expects sales realizations and per unit log and haul costs to be comparable and fee harvest volumes to be moderately higher. Forestry and road costs in the West and South are expected to be seasonally higher.

In the Real Estate, Energy and Natural Resources segment, Weyerhaeuser anticipates earnings and adjusted EBITDA is expected to be marginally lower than the year-ago period.

Within the Wood Products segment, the company predicts earnings and adjusted EBITDA to be in line with the second quarter of 2022.

Zacks Rank

Weyerhaeuser currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Few Recent Construction Releases

United Rentals, Inc. URI reported better-than-expected second-quarter 2022 results. Better fleet productivity on broad-based rental demand in construction and industrial verticals, higher total and rental revenues along with stronger pricing helped the company to boost profit.

URI also lifted its full-year guidance for total revenues, adjusted EBITDA and free cash flow, given broad-based end-market activity, contractor backlogs, customer sentiment and our visibility through the balance of the year.

NVR, Inc.’s NVR second-quarter 2022 earnings missed the Zacks Consensus Estimate but revenues surpassed the same.

The company reported earnings of $123.65 per share, increased 50% from the prior-year figure of $82.45 per share. Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.66 billion for the reported quarter, reflecting growth of 16% on a year-over-year basis. Higher average price of settlements in the quarter and lower lumber prices led to the year-over-year improvement.

PulteGroup Inc. PHM reported mixed results for second-quarter 2022, with earnings surpassing the Zacks Consensus Estimate but revenues missing the same.

Earnings for PHM grew 58.7%, from $1.72 per share a year ago. Revenues increased 16.9% from the year-ago figure of $3.36 billion.

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