August Equities: NMI/PMI Birdseye - Deep Dive Sector/Company Analysis
one of world’s largest owners of timberlands, owning/controlling over 25 million acres of timberland in US/Canada, they also manufacture wood products (3 subsects of their business)
Net earnings increased 18% compared with Q1. Earnings before special items increased 21% compared with Q1 and 57% compared with one year ago. “ We delivered Weyerhaeuser's highest EBITDA since 2006, when the company's operations were nearly three times larger than they are today.”
Wood Products (+$216 million net sales)
2Q 2018 Performance - Average sales realizations for lumber and oriented strand board improved significantly compared with the first quarter, and engineered wood products realizations increased modestly.
3Q 2018 Outlook - Weyerhaeuser expects earnings before special items and Adjusted EBITDA will decrease compared with the second quarter.
Timberlands (+$66 million net sales)
2Q 2018 Performance - South- log sales volumes were comparable with the Q1. Logging costs increased seasonally. West - slightly higher average log sales realizations were more than offset by seasonally higher forestry, road and unit logging costs
3Q 2018 Outlook - Weyerhaeuser expects third quarter earnings and Adjusted EBITDA will be lower than the second quarter, but slightly higher than the third quarter of 2017.
Real Estate, Energy & Natural Resources (+$7 million net sales)
2Q 2018 Performance - Real Estate sales increased slightly compared with the first quarter and Energy and Natural Resources royalties were modestly higher.
3Q 2018 Outlook - Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be higher than the second quarter.
So all in all Q2 looks great for them but they are forecasting a slight decline in Q3…
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