Top-News
@chartgranate
Beiträge:
4
Zugriffe: 372 / Heute: 1
Zugriffe: 372 / Heute: 1
Wednesday, October 24, 2001 - 12:00 a.m. Pacific
Earnings: Weak economy hammers away at Weyerhaeuser's profit, sales
By Drew DeSilver
Seattle Times business reporter
The link between the wood-products industry and the broader economy is clear, linear and nearly inescapable: When times are good, people use more lumber, printer paper and cardboard boxes. When times are bad, they use less.
So it surprised almost no one, on Wall Street or off, when Weyerhaeuser yesterday reported third-quarter profit fell by more than half, to $91 million from $199 million a year ago.
At 41 cents a share, vs. last year's 90 cents a share, the profit missed analysts' already lowered expectations by a penny. Plunging prices for just about everything the Federal Way company makes pushed sales down 4.9 percent, to $3.74 billion from $3.93 billion a year earlier.
Chief Executive Steven Rogel warned in a written statement that thing won't get better soon: "Given the extreme economic uncertainty, we expect difficult business conditions in the fourth quarter."
Nonetheless, investors and analysts said, Weyerhaeuser was managing the downturn about as well as could be expected. The company plans to cut production at several wood-products facilities; last month it said it would permanently close a fine-paper machine and paper sheeter in Longview and a linerboard machine in Springfield, Ore., firing almost 200 workers.
"Downtime is important," said Brian Kutzera, a securities analyst with Safeco Asset Management, which owns 261,541 Weyerhaeuser shares. "It shows restraint on their part and a concern for what the market will support."
On the New York Stock Exchange yesterday, Weyerhaeuser shares lost 59 cents, to close at $49.87.
Weak demand in a slumping economy has pushed down prices in the forest-products industry.
Northern bleached softwood pulp, which went for $540 a metric ton at the beginning of the year, now sells for $383 a metric ton.
Newsprint prices have dropped more than 12 percent since midyear, and the "Random Lengths" market report framing-lumber composite price has fallen back to $270 after spiking to nearly $400 last spring.
Weyerhaeuser's competitors aren't doing much better. Smurfit-Stone, the biggest maker of cardboard boxes, reported sharply lower profits yesterday, while newsprint leader Bowater said it lost $1.8 million.
Even Willamette Industries of Portland, the target of a nearly year-long hostile takeover bid by Weyerhaeuser, said this month its third-quarter profit had fallen 21.2 percent, though the company still beat Wall Street estimates.
Pulp and paper was the hardest hit of Weyerhaeuser's divisions, with operating profit down 71 percent from a year ago.
Lower log prices caused a 13 percent drop in operating profits in the company's timberlands business.
Although wood products, which includes Weyerhaeuser's oriented strandboard business, saw a 4 percent increase in operating profit, the company said prices weakened during the quarter, approaching first-quarter levels by the end of September.
Citing those trends, analyst Steven Chercover with D.A. Davidson in Lake Oswego, Ore., cut his fourth-quarter earnings estimate to 14 cents a share, from 34 cents.
Nonetheless, said Jason Cherney, a portfolio manager at Seattle's Laird Norton Trust, Weyerhaeuser is a well-run company and should weather the current economic turmoil. Laird Norton owns 276,792 Weyerhaeuser shares.
Drew DeSilver can be reached at 206-464-3145 or at ddesilver@seattletimes.com.
Earnings: Weak economy hammers away at Weyerhaeuser's profit, sales
By Drew DeSilver
Seattle Times business reporter
The link between the wood-products industry and the broader economy is clear, linear and nearly inescapable: When times are good, people use more lumber, printer paper and cardboard boxes. When times are bad, they use less.
So it surprised almost no one, on Wall Street or off, when Weyerhaeuser yesterday reported third-quarter profit fell by more than half, to $91 million from $199 million a year ago.
At 41 cents a share, vs. last year's 90 cents a share, the profit missed analysts' already lowered expectations by a penny. Plunging prices for just about everything the Federal Way company makes pushed sales down 4.9 percent, to $3.74 billion from $3.93 billion a year earlier.
Chief Executive Steven Rogel warned in a written statement that thing won't get better soon: "Given the extreme economic uncertainty, we expect difficult business conditions in the fourth quarter."
Nonetheless, investors and analysts said, Weyerhaeuser was managing the downturn about as well as could be expected. The company plans to cut production at several wood-products facilities; last month it said it would permanently close a fine-paper machine and paper sheeter in Longview and a linerboard machine in Springfield, Ore., firing almost 200 workers.
"Downtime is important," said Brian Kutzera, a securities analyst with Safeco Asset Management, which owns 261,541 Weyerhaeuser shares. "It shows restraint on their part and a concern for what the market will support."
On the New York Stock Exchange yesterday, Weyerhaeuser shares lost 59 cents, to close at $49.87.
Weak demand in a slumping economy has pushed down prices in the forest-products industry.
Northern bleached softwood pulp, which went for $540 a metric ton at the beginning of the year, now sells for $383 a metric ton.
Newsprint prices have dropped more than 12 percent since midyear, and the "Random Lengths" market report framing-lumber composite price has fallen back to $270 after spiking to nearly $400 last spring.
Weyerhaeuser's competitors aren't doing much better. Smurfit-Stone, the biggest maker of cardboard boxes, reported sharply lower profits yesterday, while newsprint leader Bowater said it lost $1.8 million.
Even Willamette Industries of Portland, the target of a nearly year-long hostile takeover bid by Weyerhaeuser, said this month its third-quarter profit had fallen 21.2 percent, though the company still beat Wall Street estimates.
Pulp and paper was the hardest hit of Weyerhaeuser's divisions, with operating profit down 71 percent from a year ago.
Lower log prices caused a 13 percent drop in operating profits in the company's timberlands business.
Although wood products, which includes Weyerhaeuser's oriented strandboard business, saw a 4 percent increase in operating profit, the company said prices weakened during the quarter, approaching first-quarter levels by the end of September.
Citing those trends, analyst Steven Chercover with D.A. Davidson in Lake Oswego, Ore., cut his fourth-quarter earnings estimate to 14 cents a share, from 34 cents.
Nonetheless, said Jason Cherney, a portfolio manager at Seattle's Laird Norton Trust, Weyerhaeuser is a well-run company and should weather the current economic turmoil. Laird Norton owns 276,792 Weyerhaeuser shares.
Drew DeSilver can be reached at 206-464-3145 or at ddesilver@seattletimes.com.
Es gibt keine neuen Beiträge.
