Just as a new biography of its founder is published, Weyerhaeuser is riding high. Around its first-quarter earnings call last week, positive notices of the company have been published in Forbes, the Financial Times, Seattle Times and Motley Fool, among many other publications.
Another Washington timber giant, Plum Creek Timber, also reported positive results in its earnings call.
As Jon Talton with the Seattle Times points out, Weyerhaeuser wasn’t doing nearly as well when the housing market took a dip. But both Weyerhaeuser and Plum Creek have tranformed into leaner real estate investment trusts (REITs) and are benefitting from the recovering housing market and demand from Asia for timber.
...Weyerhauser is back, after a fashion. Last week, it reported robust first-quarter earnings that beat Wall Street’s expectations. Earlier this month, it increased its dividend. The news attracted the attention of Financial Times’ influential Lex column, which proclaimed on Monday, “Now streamlined around its forest-based segments, the company can capitalise on America’s reinvigorated homebuying.” Behind the strong earnings was the best performance by its wood products unit since 2005, during the prime of the housing boom.
The recovery has been much quicker in Weyerhaeuser’s land in the Western U.S. because those properties were able to take advantage of increased demand from Asia, according to the Capital Press.
Despite its bigger land holdings in the South, that region accounted for only $61 million in log sales during the first quarter of 2013, compared to $177 million for the West.
As the housing market continues to improve, Weyerhaeuser expects the trend to lift the economic outlook of Southern timberlands as well, Fulton said.
“We’re clearly on the path to recovery,” he said, noting that the “entire industry is in the process of going back to work.”
The numbers are hard to argue with.
Weyerhaeuser has reported that its total sales — including logs, wood products, pulp and real estate — increased more than 30 percent in the first quarter of 2013, to $1.95 billion, compared to last year.
At $144 million, profits were more than three times higher compared to the first quarter of 2012, when the company reported $41 million in net income.