Yahoo Finance Weyerhaeuser's (WY) Shares Up on Q1 Earnings Beat, Net Sales Lag
Weyerhaeuser Company’s WY shares increased 2.7% in the after-hours trading session on Apr 25 after it reported mixed results for first-quarter 2024. Its earnings beat the Zacks Consensus Estimate but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West, a decrease in domestic sales volumes as well as sales realizations accompanied by increased lumber manufacturing and raw materials costs. Also, export sales volumes were softer, especially in China.
Nonetheless, the company is optimistic about signing the third carbon capture and sequestration agreement in the U.S. South and is encouraged by the improving fundamentals for housing and repair and remodel demand. It remains focused on enhancing its business performance through strategic initiatives and maintaining shareholder value.
Inside the Headlines
The company reported adjusted earnings of 16 cents per share, beating the Zacks Consensus Estimate of 15 cents by 6.7%. The bottom line, however, decreased 23.8% from the year-ago reported figure of earnings of 21 cents per share.
Weyerhaeuser Company Price, Consensus and EPS Surprise
Weyerhaeuser Company price-consensus-eps-surprise-chart | Weyerhaeuser Company Quote
Net sales for the quarter were $1.8 billion, which missed the consensus mark of $1.84 billion by 2.3% and declined 4.5% from $1.88 billion reported in the year-ago quarter.
Adjusted EBITDA was $352 million, down 10.9% from $395 million in the year-ago period.
Segment Details
Timberlands: Net sales (including inter-segment sales of $134 million) from the segment were $521 million, down from the year-ago figure of $604 million. Adjusted EBITDA was $144 million, down from $188 million in the year-ago quarter. Meanwhile, we expected segment sales to decline 9.7% year over year to $545.4 million in the quarter.
Real Estate, Energy and Natural Resources: For the reported quarter, the segment’s net sales amounted to $107 million, up from $101 million a year ago. The reported figure was higher than our expectation of $99.4 million for the quarter. Adjusted EBITDA was $94 million, indicating growth from $89 million reported in the year-ago period.
Wood Products: For the first quarter, the segment’s sales totaled $1.3 billion, down from $1.32 billion in the year-ago period. Adjusted EBITDA was $184 million, up from $148 million a year ago. We expected segment sales to grow 2.9% year over year to $1.36 billion in the quarter.
Financial Highlights
As of Mar 31, 2024, Weyerhaeuser had cash and cash equivalents of $871 million, down from $1.16 billion in 2023 end. Long-term debt was $4.86 billion at the quarter’s end, down from $5.07 billion in 2023 end.
Net cash from operations was $124 million for the first quarter of 2024, down from $126 million reported in the year-ago period.
Q2 Outlook
For second-quarter 2024, Weyerhaeuser expects earnings (before special items) and adjusted EBITDA in the Timberland segment to be slightly higher sequentially. In the West, it expects fee harvest volumes to be moderately high from the reported quarter and per unit log and haul costs to be high. However, sales realizations are expected to be comparable. In the South, WY expects moderately higher fee harvest volumes, along with comparable sales realizations and per-unit log and haul costs. Forestry and road costs in both the West and South are anticipated to be seasonally higher. In the North, the company expects fee harvest volumes to be seasonally significantly lower while sales realization is expected to be moderately higher.
In the Real Estate, Energy and Natural Resources segment, the company expects earnings to be approximately $10 million lower sequentially. Adjusted EBITDA is likely to be comparable with the prior quarter.
Within the Wood Products segment, the company predicts earnings and adjusted EBITDA to be slightly high sequentially (excluding the effect of changes in average sales realizations for lumber and oriented strand board). It expects higher sales volumes and slightly lower log costs along with moderately lower unit manufacturing costs in lumber. For oriented strand board (“OSB”), sequentially it anticipates a moderate increase in sales volumes, slightly high fiber costs and comparable unit manufacturing costs. For engineered wood products, the company predicts higher sales volumes, comparable sales realizations and higher raw material costs (mainly for OSB webstock). WY anticipates sequentially higher distribution.
Zacks Rank & Recent Construction Releases
Weyerhaeuser currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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Earnings increased on a year-over-year basis despite a net sales decline. Sales declined due to lower sales volumes in the Insulation and Composites segments.
Masco Corporation MAS reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate but net sales lagged the same. On a year-over-year basis, earnings increased while net sales declined. Strong operational efficiency helped deliver solid earnings.
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Otis Worldwide Corporation OTIS reported mixed results in first-quarter 2024, wherein its earnings surpassed the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines grew on a year-over-year basis.
Its quarterly results reflected 14 consecutive quarters of organic sales growth and the results were marked by a high-teens growth in adjusted earnings per share. Thanks to the strength in modernization, the company witnessed orders growth of more than 10%, leading to mid-teens backlog growth.
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