For Immediate Release |
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July 16, 1997 |
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Weyerhaeuser Net Earnings Improve During Second Quarter
FEDERAL WAY Weyerhaeuser Company (NYSE: WY) today reported second quarter net
earnings of $90 million, or 47 cents per common share, before a special after-tax net gain
of $19 million, or 9 cents per common share. Including the gain, net earnings were $109
million, or 56 cents per common share, compared with $103 million, or 52 cents, for the
same period last year. Net sales were $2.9 billion, unchanged from the comparable quarter
last year.
The after-tax net gain is a result of Weyerhaeusers on-going effort to narrow its
focus and upgrade the quality of the assets of its core businesses. During the quarter,
these efforts resulted in a gain on the sale of the Weyerhaeuser Mortgage Company (WMC)
that were somewhat offset by costs associated with plans to close the Plymouth, North
Carolina plywood facility.
For the first six months, Weyerhaeuser reported net earnings before special items of
$136 million, or 69 cents per common share. During the same period last year, net earnings
were $245 million, or $1.24 per common share. Net sales during the first half were $5.5
billion, unchanged from last year.
"Our second quarter results are down from last year, but they represent an
improvement from first quarter," said John W. Creighton, Jr., Weyerhaeuser president
and chief executive officer. "Much of this is attributable to the efforts our
employees have made to improve our operating performance company-wide. As a result, our
manufacturing facilities are running extremely well."
Creighton also credited market conditions for some of the second quarter improvement.
"The price increases in paper and newsprint that we implemented during the second
quarter had a positive effect on the Pulp, Paper and Packaging businesses," Creighton
said. "We expect the positive trend started by these increases to continue into the
third quarter. Meanwhile, our Timberlands and Wood Products segment continues to benefit
from the strong domestic lumber market." Results by segment for the second quarter:
- Timberlands and Wood Products: Operating earnings, including the $15 million charge
associated with the plywood mill closure, were $211 million compared with $217 million
last year. Strong domestic lumber and log markets helped offset the slower sales in Japan
and the weak plywood and oriented strand board markets.
- Pulp, Paper and Packaging: Operating earnings were $22 million compared with $35 million
in 1996. Global economic growth continues to drive increasing demand for pulp and paper
products and improved market prices for most pulp, paper and packaging products.
- Real Estate and Financial Services: Earnings were $50 million, including the $45 million
gain on the WMC sale, compared with $6 million last year.
Weyerhaeuser Company is one of the largest integrated forest product companies in the
world. Its principal segments are timberlands and wood products; pulp, paper and
packaging; and real estate. It is the worlds largest private owner of merchantable
softwood timber and producer of softwood lumber and market pulp. It also is one of North
Americas largest recyclers of office wastepaper, newspaper and corrugated boxes.
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Comments by John W. Creighton, Jr. contain statements concerning the
companys future results and performance that are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These statements are
subject to uncertainties and risks that may cause actual results to differ materially from
those projected. The companys businesses are cyclical in nature and are influenced
by economic factors such as interest rates, housing starts, industrial production and GDP
growth in the United States. The companys performance is also affected by its
ability to successfully implement its business improvement plans and other internal
performance objectives and its ability to achieve expected returns on numerous capital
projects. Many of the companys products are used in the manufacture of other
products and face the threat of customers substituting other materials. The company is
also a large exporter and is affected both by changes in economic activity in Europe and
Asia, particularly by changes in GDP and housing starts in Japan, our largest export
market, and by changes in currency exchange rates. The companys timberlands and
manufacturing facilities are subject to extensive forestry, land use and environmental
regulations that change frequently. The companys major businesses are also affected
by government policies regarding the management of public lands in the United States and
Canada and by international trade restrictions. In addition to unanticipated changes in
government regulation and policy, natural disasters and unusual weather conditions can
damage the companys forests and operations and impact supply conditions for the
companys products. |