Sales of Assets Keep Weyerhaeuser Afloat in 3Q08

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Researched by Industrial Info Resources (Sugar Land, Texas)--Weyerhaeuser Company (NYSE:WY) (South Federal Way, Washington) has posted a third-quarter profit of $280 million, up from $101 million in the same period last year, through one-time gains from the sale of its packaging business to International Paper (NYSE:IP) (Memphis, Tennessee) and its Australian operations. However, excluding the sales gains, the company posted a loss of $3 million. "There is little doubt that we're facing extraordinary market conditions," President and CEO Daniel Fulton said.

As housing-market conditions remain difficult, Fulton said the company's businesses will continue to feel the effects. "Such a slowdown affects and challenges the majority of the businesses in our portfolio, and we're prepared to take the necessary actions that these unstable market conditions demand," he said. "Our strength begins with the very core of our company -- more than 6 million acres of timberlands, which we intensively manage in order to extract maximum value on a long-term sustainable basis." However, the company said it expects its timberlands business to decline in the next quarter. Fee harvest volumes are expected to be lower because of the weak domestic market, the company stated in a news release. "Weyerhaeuser expects challenging housing market conditions to continue into the fourth quarter," the company stated. "We anticipate operating losses to worsen as prices and volumes decline in the seasonally slower fourth quarter." Net sales for the third quarter dropped to $2.6 billion compared with $4.1 billion in the same period last year.

In an effort to achieve $375 million annual savings, the company is following through with its announcement during the previous quarter that it will eliminate 1,500 corporate-level jobs. "As we manage through the downturn, we'll continue to look for additional and sustainable savings," Fulton said.

Industrial Info is tracking nine active Weyerhaeuser project worth $49 million. The projects range from a $1 million maintenance shutdown to a $25 million oxygen delignification system addition at a pulp mill.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.