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NEW YORK, Feb 8 (Reuters) - Weyerhaeuser Co WY.N posted a fourth-quarter loss on Friday as its wood products business was hurt by the slump in the U.S. housing market, sending shares falling 4.3 percent in early trading.
Weak housing markets across the United States have dampened demand for timber and wood products, and Weyerhaeuser, one of the world’s largest forest products makers, has been cutting production and exploring the sale of noncore assets in a bid to weather the downturn.
Weyerhaeuser anticipates continued weakness in the first quarter as well as weak results from all its businesses during the period.
“Clearly the biggest weakness is in the wood products segment that is being tremendously impacted by the recession we are seeing in U.S. housing and the very low demand,” said Soleil Securities analyst Anna Torma.
Excluding items, the company reported earnings of 42 cents a share, down from 95 cents a year ago, but above Wall Street’s estimate of 35 cents a share.
Revenues slid 18 percent to $3.94 billion on declining sales from wood products and timberlands. Analysts, on average had looked for revenues of $4.12 billion, according to Reuters Estimates.
Last month, the National Association of Home Builders said U.S. homebuilder sentiment was hovering near a record low, as a glut in houses for sale and tight lending conditions depressed the housing market.
Federal Way, Washington-based Weyerhaeuser continues to expect to incur significant losses in its wood products business in the first quarter, and does not see any improvement in market conditions during the quarter.
The company posted a quarterly net loss of $63 million, or 30 cents a share, compared with a year-earlier profit of $507 million, or $2.12 a share, that included a refund of duties.
“Despite difficult market conditions, which we expect to continue through 2008, Weyerhaeuser remains focused on managing through the downturn and positioning the company to take full advantage of stronger markets once conditions improve,” said Chief Executive Steven Rogel, in a statement.
Last year, the company merged its fine paper business with Canada’s Domtar Corp UFS.TOUFS.N and said it is exploring the sale of its containerboard and packaging business.
The company recently said it was selling its European engineered wood products business to Finland-based Finnforest, and is also exploring a possible sale of its commercial construction sales business.
Weyerhaeuser warned it expects lower first-quarter earnings from its packaging, cellulose fibers and timberlands segments. It also anticipates losses from its wood products and real estate businesses.
The stock dropped $2.83 at $61.88 in early trading on the New York Stock Exchange.
Shares of Weyerhaeuser have fallen about 12 percent over the last three months, compared with an 11 percent decline in the Standard & Poor’s Paper and Forest Products Index .15GSPAFP. (Reporting by Euan Rocha; Editing by Lisa Von Ahn/Jeffrey Benkoe)