Weyerhaeuser, one of the world’s largest forest products companies, reported a net loss of $148 million for the first quarter of 2008, a large drop from the $720 million in earnings recorded in the same period last year.
Net sales for the first quarter were $3.4 billion, down 24.4 percent from $4.5 billion last year.
"Business conditions are extremely challenging," said Daniel Fulton, president and CEO. "The number of single-family housing starts is now below the previous lows of 1979-82. Since many of our products are dependent upon single-family housing starts, we've experienced record low product prices when adjusted for inflation.”
The company has reduced its capacity for oriented strand board (OSB) and softwood lumber, Fulton said, and the company “will continue to take action as necessary to balance production to demand.”
The company is putting stock, however, in selling assets to maintain a “focus on our long-term strategic direction,” he added. One example has been the sale of Weyerhaeuser’s containerboard packaging and recycling assets to International Paper for $6 billion.
Declining prices and rising costs have hit the company, with prices for OSB and engineered wood products on the decline. Log costs, fuel costs and costs related to silviculture (replanting forests) have all risen, causing further strain, the company said.
Based in Federal Way, Wash., Weyerhaeuser had 2007 sales of $16.3 billion.