Weyerhaeuser’s net profits soared by more than US$1bn in the third quarter but its wood products division still recorded a loss of US$100m.
The majority (US$1.035bn) of the company’s US$1.16bn profits came from income tax adjustments related to the reversal of deferred taxes as a result of Weyerhaeuser’s conversion to a real estate investment trust. Excluding these, the company recorded profits of US$137m (2009: US$56m loss).
“It’s obvious that the overall housing market remains in an uncertain state as the expiration of the housing tax credit led to a precipitous drop in prices and volume for our wood products business,” said president and CEO Dan Fulton.
The wood products division’s losses deepened to US$100m from US$3m in the previous quarter.
Quarterly average sales realisations for lumber declined 18% in the third quarter compared with the second, while OSB sales dipped 30%. Sales volumes for engineered wood products fell by more than 20%, while production volumes fell at OSB and engineered lumber mills.
Weyerhaeuser expects a comparable loss from the division in the fourth quarter.
