The company said that sales volumes increased seasonally across all product lines and that manufacturing costs improved as a result of higher operating rates and operational excellence initiatives. Western log costs were also lower. These higher sales volumes and lower costs were partially offset by lower average sales realizations for lumber and oriented strand board.
In its outlook for the third quarter, Weyerhaeuser said it expects significantly higher earnings from the cellulose fibers segment primarily due to minimal scheduled maintenance outage days. Additionally, the company anticipates lower average pulp sales realizations, partially offset by increased sales volumes.
Consensus estimates call for third-quarter EPS of $0.20 on revenue of $1.82 billion. For the full year, the consensus estimate for EPS is $1.09 on $7.26 billion in revenues.
CEO Doyle Simmons said:
Each of our businesses delivered solid second quarter operating results, as operational excellence efforts helped mitigate the delayed arrival of the spring building season and the continuing challenge of a strong U.S. dollar. In addition, we repurchased over $150 million of common shares in the quarter and neared completion of our existing authorization. Looking forward, we are well positioned to capitalize on the improving housing market, and we remain relentlessly focused on driving value for our shareholders through operational improvements and disciplined capital allocation.
Weyerhaeuser’s shares traded down about 1% in pre-market trading Friday morning, having closed at $30.45 last night, in a 52-week range of $29.63 to $37.04. The consensus price target for the shares was around $36.00 before today’s report.