Weyerhaeuser Reports Record Second Quarter Results
Weyerhaeuser Company (the “company”) reported second quarter net earnings of $1.0 billion, or $1.37 per diluted share, on net sales of $3.1 billion. This compares with net earnings of $72 million, or 10 cents per diluted share, on net sales of $1.6 billion for the same period last year and net earnings of $681 million for the first quarter of 2021. There were no special items in second quarter or first quarter 2021. Net earnings before special items was $77 million for the same period last year, or 11 cents per diluted share.
– Achieved net earnings of $1.0 billion, or $1.37 per diluted share
– Highest quarterly Adjusted EBITDA on record at $1.6 billion
– Generated record cash flow from operations of over $1.3 billion
Adjusted EBITDA for the second quarter of 2021 was $1.6 billion compared with $386 million for the same period last year and $1.1 billion for the first quarter of 2021.
“In the second quarter, our teams again delivered the company’s strongest quarterly results on record, surpassing last quarter’s Adjusted EBITDA record by over 40 percent,” said Devin W. Stockfish, president and chief executive officer. “Year-to-date, our Adjusted EBITDA is almost $2 billion higher than this time last year and exceeds our full year results for each of the last 14 years. We also generated record operating cash flow in the quarter and reduced long-term debt by another $225 million. Looking forward, our outlook remains favorable for continued strength in residential construction, our financial position is exceptionally strong, and with year-to-date Adjusted Funds Available for Distribution of almost $1.9 billion, we are excited for the opportunity to return significant cash to shareholders through the variable supplemental component of our new dividend framework.”
Q2 2021 Performance – In the West, export sales realizations increased significantly from the first quarter and export sales volumes were modestly higher as the company shifted additional volume to the export market to serve higher demand, particularly from China. Fee harvest volumes were comparable as the company continued salvage operations. Domestic sales realizations were slightly lower as salvage activity continued to yield a greater mix of smaller diameter logs. In the South, fee harvest volumes increased significantly and sales realizations for sawlogs and fiber logs were slightly higher. In both regions, forestry and road expenses increased seasonally.
Q3 2021 Outlook – Weyerhaeuser expects third quarter earnings and Adjusted EBITDA will be significantly lower than the second quarter. In the West, the company anticipates slightly lower fee harvest volumes, seasonally higher forestry and road expenses, and higher per unit log and haul costs. The company expects moderately higher export sales realizations and slightly lower domestic sales realizations. In the South, the company expects significantly higher fee harvest volumes, slightly higher per unit log and haul costs, and seasonally higher forestry and road expenses. Sales realizations are expected to be slightly lower due to mix.
In July 2021, the company completed the previously announced sale of 145,000 acres of timberlands in the North Cascades region of Washington. Third quarter will include a gain of approximately $30 million on this transaction, which will be reported as a special item.
Real Estate, Energy & Natural Resources
Q2 2021 Performance – The number of real estate acres sold and the average price per acre decreased compared with the first quarter due to the timing of real estate sales and mix of properties sold. Energy & Natural Resources earnings and Adjusted EBITDA increased, primarily due to higher production of construction materials.
Q3 2021 Outlook – Weyerhaeuser anticipates third quarter earnings will be significantly higher than third quarter 2020 due to a lower average basis resulting from the mix of properties sold. The company expects Adjusted EBITDA will be comparable to third quarter 2020. The company now expects full year 2021 Adjusted EBITDA for the segment will be approximately $290 million, an increase from the $255 million previously expected.
Q2 2021 Performance – Sales realizations for lumber and oriented strand board increased 25 percent and 48 percent, respectively, compared with first quarter averages. Sales volumes for lumber increased moderately. Oriented strand board production and sales volumes were modestly lower, and unit manufacturing costs increased, due to planned maintenance outages. Production and sales volumes for solid section and I-joist products increased and sales realizations improved as the company continued to benefit from previously announced price increases. Raw material costs for Wood Products increased, primarily for Canadian logs, oriented strand board webstock, resin and veneer.
Q3 2021 Outlook – Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be significantly lower than the second quarter. To date, third quarter benchmark pricing for lumber and oriented strand board is significantly lower than the second quarter average. The company expects higher sales volumes and improved unit manufacturing costs for lumber and oriented strand board, as well as higher raw material costs.
Q2 2021 Performance – Second quarter results include an increase in variable compensation expense due to a year-to-date adjustment for performance-based incentive compensation, as well as an increase in the noncash charge from elimination of intersegment profit in inventory and LIFO, primarily due to higher costing within our lumber and log inventories.
For the full second quarter results, click here.
Weyerhaeuser Company, one of the world’s largest private owners of timberlands, began operations in 1900. We own or control approximately 11 million acres of timberlands in the U.S., and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products in North America. Our company is a real estate investment trust. In 2020, we generated $7.5 billion in net sales and employed approximately 9,400 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.
Nancy Thompson – Media Relations – (919) 861-0342
Source: Weyerhaeuser Company