Weyerhaeuser earnings down 55 percent
Federal Way, Wash.-based Weyerhaeuser saw net earnings of $101 million for the third quarter, down 55 percent from earnings of $224 million in the same period last year. Sales fell 10.9 percent to $4.1 billion from $4.6 billion.
The company took several charges in the quarter, including a $17 million charge for closures and restructuring in the company’s wood products segment, and an additional $17 million charge for restructuring administrative functions, including adding a new information technology provider.
Weyerhaeuser also took $16 million in charges on real estate assets. The company recorded a $26 million gain for legal settlements and a $7 million gain on the sale of closed operations.
“An already weak wood products market deteriorated further during the third quarter,” said Steven Rogel, chairman, president and CEO. “We were adjusting our production to meet our reduced order level, but we took additional action in the quarter as demand and prices slid. We will continually adjust our operating posture as necessary to balance production with demand.”
The company has seen improved mill productivity in its cellulose fibers and containerboard packaging segments, Rogel said.
Earlier this month, the forest products company said it will close parts of two mills in Louisiana and Georgia.
The company will convert its plywood operation in Dodson, La., to a veneer manufacturing operation effective Oct. 26, and will stop veneer production at its Colbert, Ga., operation. The Colbert site will continue to be used for beam construction, the company said.
Chief operating officer resigns at Builders FirstSource
Dallas-based Builders FirstSource has announced the resignation of Kevin O’Meara, president and chief operating officer.
Astatement from the company said O’Meara resigned because he believed it would be “mutually beneficial” for both the company and him, and that he plans to pursue “new corporate leadership opportunities.”
The company said it has no plans to fill the position at this time.
“As one of the three founders of Builders FirstSource, over the last 10 years Kevin was instrumental in growing the company to over $2 billion in revenues, culminating in the company’s initial public offering in June of 2005,” said Paul Levy, chairman of the board.
Builders FirstSource supplies and manufactures building products for residential new construction, with operations in 13 states.
Sun comes out for housing starts
Home sales should bottom out by the end of the first quarter of 2008, and housing starts are expected to start rising in the third quarter, according to the most recent forecast of the National Association of Home Builders (NAHB). Speaking at an Oct. 24 housing conference, NAHB economist David Seiders pointed to a number of positive economic factors, including job growth, controlled inflation and short-term interest rate cuts.
The NAHB is predicting 828,000 new single-family homes for 2007 and 781,000 for 2008, a 5.6 percent decline. Total housing starts are expected to register 1.36 million this year and 1.2 million next year, an 11.9 percent decline.
Addressing the subprime mortgage crisis, Mark Zandi, an economist at Moody’s, predicted that certain regions of the country would receive more negative fallout than others. Among them are Arizona; California; Florida; Nevada; Boston; Washington, D.C.; the New Jersey coast; and the Carolinas.
Michael Moran, chief economist of Securities America, pointed out that subprime loans hold a 13.5 share of the mortgage market, and only 20 percent of these loans are “under stress.”
Most recently, the U.S. Commerce Department released housing starts data showing September saw the slowest pace of new residential building in 14 years (since March 1993) when 1.08 million units were under construction in the United States.