Weyerhaeuser reported second-quarter net earnings of $32 million, down 89.3 percent compared with $298 million in the same period last year.
The company had sales of $4.3 billion for the second quarter, down 12.2 percent from $4.9 billion last year.
The forest products giant took several charges in the quarter, including $30 million for impairments in the company’s wood products and real estate segments, closures of wood products facilities and the sale of Canadian distribution facilities. The company also took a $27 million charge related to extinguishment of debt and a $25 million charge for legal settlements and a contract termination.
Second-quarter 2006 results have been recast to reflect the discontinued operations, the company noted. Those discontinued operations include Weyerhaeuser’s fine paper business and related assets.
Other reasons for lower sales and earnings include lower prices on lumber, plywood and oriented strand board; increased prices for cellulose fibers; and declining margins in the company’s real estate assets.
"In response to continued challenging market conditions, we managed production and costs throughout the second quarter," said Steven Rogel, chairman, president and CEO of Weyerhaeuser. “In the coming quarter, we will look for ways to further reduce costs and improve performance as we face challenges produced by the continuing sluggish housing market.”
Weyerhaeuser is one of the world's largest forest products companies with 2006 sales of $21.9 billion.