Weyerhaeuser returns to profitability but wood products division still in red

31 July, 2010

Weyerhaeuser has reported second-quarter net profits of US$14m on net sales of US$1.8bn.

The result compared with a net loss of US$106m on net sales of US$1.4bn a year ago.

“In the second quarter we returned to profitability and all businesses were cash positive from operations,” said president and CEO Dan Fulton.

“I’m encouraged by our ability to profitably manage operations in an uncertain climate and with the lack of a sustained housing recovery.”

The wood products division reported a US$3m loss, an improvement from the US$162m loss of a year ago.

Sales volumes for most products increased moderately compared to first quarter levels, with improvements partially offset by higher log costs.

From mid-May market conditions deteriorated substantially, with lumber and OSB sales falling sharply. Engineered wood sales volumes experienced a considerable drop in sales and reduced operating rates in the latter half of the quarter to match demand.

“Weyerhaeuser expects a significantly larger loss from the segment in the third quarter compared to the second quarter,” it said.

“The company expects average price realisations for lumber and OSB to drop below first quarter levels.”