* Q3 breakeven vs. EPS $1.33 year earlier
* Ex. items, loss 26 cts per share
* Street expected loss 45 cents per share
* Revenue drops 33 percent (Adds outlook; updates stock price.)
By Ernest Scheyder
NEW YORK, Oct 30 (Reuters) - Timber developer and home builder Weyerhaeuser Co (WY.N) posted better-than-expected results on Friday due largely to cost-cutting, although sales in all its units plunged.
The Federal Way, Washington-based company said the beleaguered housing industry continues to hurt its performance, and that it slashed costs by 48 percent to boost results.
Three of Weyerhaeuser's four business units are heavily tied to the home construction sector.
"Although we saw signs of improvement in the housing sector early in the third quarter, the market remains fragile," Chief Executive Dan Fulton said in a statement.
Additionally, Weyerhaeuser warned that seasonal dips and the housing downturn will put "significant pressure" on fourth-quarter results.
The company's cellulose fibers unit, which supplies material used to make toothpaste and ice cream, among many other items, helped boost results due in part to a $122 million alternative fuel tax credit that encourages businesses to use biomass for power production.
For the quarter, the company broke even, compared with a profit of $280 million, or $1.33 per share, in the year-ago period.
Excluding one-time items such as the alternative fuel credit and impairment and restructuring charges, Weyerhaeuser posted a loss of $56 million, or 26 cents per share.
By that measure, analysts had expected a loss of 45 cents per share, according to Thomson Reuters I/B/E/S estimates.
Sales fell 33 percent to $1.41 billion, compared with the $1.42 billion analysts had expected.
Shares fell 62 cents to $36.90 in late-morning trading. The stock has traded between $18.68 and $41.28 in the past 52 weeks. (Reporting by Ernest Scheyder, editing by Gerald E. McCormick, Dave Zimmerman, Gunna Dickson)