US waits for housing uplift

17 November 2014


A slower than forecast recovery in the North American housing sector continued to dampen earnings among some of the continent’s largest forestry and timber products companies.

In the latest round of third-quarter results, one of the biggest, Weyerhaeuser, said it expected earnings at its wood products division to fall towards the end of the year after posting pre-tax profits for the third quarter showing a gain of just 3%.

West Fraser Timber said improvements in its third-quarter results was largely attributable to reduced costs and productivity improvements, while Plum Creek said timber performed well in a “continuing slow growth environment”.

Weyerhaeuser said pre-tax earnings at the Wood Products division rose US$3m to US$105m. Revenues fell slightly to US$1.05bn. Earnings were forecast to be “significantly weaker” in the fourth quarter due to a softer lumber and OSB market, and lower sales volumes across all product lines. Overall earnings, excluding an almost US$1bn windfall from land sales, were up 43% to US$178m on sales 2% higher at US$1.9bn.

Operating earnings at West Fraser’s lumber operations were C$101, up from C$81m in the previous three months. Improved plywood prices boosted panel operations to C$25m from C$10m. Overall earnings were up 5% to C$111m on sales down slightly at C$1.03bn.

Revenues at Plum Creek’s timber operations were up 15.6% to US$563m. Overall revenues were up 4% at US$1.04bn. Earnings at Norbord North American operations fell to US$15m from US$33m.