Weyerhaeuser, which is awaiting the outcome of its US$7.1bn hostile takeover bid for forest products rival Willamette, has announced a 45% drop in first quarter profits.
And the company warns that weak demand, low prices and higher energy costs will impact on earnings in the second quarter.
The situation has been exacerbated by a 20% fall in lumber prices, a drop in pulp and paper prices and unfavourable exchange rates in poor international market conditions.
Despite the slump, chief executive Steve Rogel – a former Willamette CEO – is confident that the two companies can achieve more together than separately, but Willamette says Weyerhaueser’s US$48 a share offer is inadequate.
