Weyerhaeuser‘s share value fell by 12% following its release of a surprise third-quarter profits warning.

US softwood duties on Canadian lumber imports and low timber prices were blamed for the warning which predicts earnings to be US5-10 cents a share, compared with analysts’ projections of US35 cents a share.

Costs associated with the takeover of rival Willamette Industries earlier this year are also cited for the expected poor performance. Weyerhaeuser had previously said the acquisition would help protect itself from market changes, such as the US duties.

Willamette Industries is also struggling with low prices, with softwood lumber now fetching about US$192 compared to US$400 at the start of the year.

  • About 300 Weyerhaeuser workers have returned to their jobs at the company’s mill in Big River, Saskatchewan.

    The staff were laid off during August, with the blame pinned on a downturn in the lumber industry and the softwood trade dispute with the US. The mill, opened last year at a cost of C$90m, has an annual production capacity of 275,000m3.

    Meanwhile, the company is planning production downtime at other mills. At its Carrot River facility 45workers are due to be laid off for up to four weeks in late October, while in Port Alberni in British Columbia, its Somass mill is expected to close for a month from October 7.

    The mill, which exports half of its red cedar to the US, expects about 250 workers to be laid off. It says the US duties totalling 31.2% have had a “devastating” impact on western red cedar operations.