Weyerhaeuser recently reported full-year net earnings $748 million or $0.99 per diluted share on net sales of $7.5 billion. Excluding special items, the company earned $891 million or a $1.18 per share, an improvement of 2% compared with 2017. Adjusted EBITDA was similar to last year at slightly over $2 billion.
For fourth quarter, CEO Devin Stockfish reported a GAAP loss of $93 million, or $0.12 per diluted share. “This loss was driven by a previously-announced non-cash charge following completion of a lump sum offer that reduced our U.S. pension liabilities by over $660 million. Excluding special items, we earned $70 million or $0.10 per diluted share for the quarter,” he said on the REIT’s Q4 earnings call. “I’m proud of the fourth quarter and full-year performance as our teams delivered strong results through a full range of market conditions, capitalizing on the upside and effectively managing the downside.”
In 2018, the company generated over $2 billion of EBITDA, including $1 billion of Wood Products EBITDA for the second year in a row. “We grew EBITDA from our real estate, energy, and natural resources business by nearly 10%. We captured over $40 million of OpEx improvements in our Timberlands business. We delivered a 65% premium to timber value from real estate sales, significantly exceeding our 30% target. We return nearly $1.4 billion at cash to shareholders through dividends and share repurchases, and we initiated a series of actions that reduced our pension liabilities by over $2 billion. This includes the annuity purchase transaction that we announced earlier this week,” he said.
Stockfish also set the stage for the housing market on the call, noting that “As interest rates and home prices continue to increase in the back-half of the year, it became apparent that many potential buyers were staying on the sidelines due to concerns about affordability. This dynamic persisted through the fourth quarter, exacerbated by increased volatility in financial markets, the threat of a government shutdown, and extremely wet weather that limited construction activity in parts of the U.S. south.”
Looking forward to 2019, he said, “fundamental economic data remains very supportive for U.S. housing. Real wages are increasing, employment continues to rise with unemployment at the lowest level since 1969, and job growth in key housing markets continues to be strong. These trends plus favorable demographics are driving the highest levels of household formation in 15 years. For 2018, household formations are expected to total approximately 1.5 million.”