February 5, 2010 / 2:18 PM / in 8 years

UPDATE 3-Weyerhaeuser Q4 loss misses estimates, stock falls

* Q4 loss 52 cents/shr vs Wall St view of 38-cent loss

* Sees lower Q1 op loss for wood products segment

* Stock falls 2.7 pct (Adds CEO comments, stock movement)

NEW YORK, Feb 5 (Reuters) - Timber developer and home builder Weyerhaeuser Co (WY.N) posted a smaller fourth-quarter loss on Friday, but it still missed Wall Street expectations and its stock fell 2.7 percent.

The company also forecast an operating loss in the first quarter for its wood products sector.

“The weak housing market continues to present challenges and affect our financial performance,” Chief Executive Officer Dan Fulton said in a statement.

Later, pressed by Wall Street analysts about the business outlook for this year, he said there was no firm indication that demand for timber from home builders was improving.

“We believe there’s some restocking and replenishment going on and we do see the downstream being more consistent in terms of how often they replenish,” he said on a conference call.

“But in terms of whether that’s truly an indication of underlying demand going to be stronger...it is still too early for us to tell.”

Asked about the outlook for new housing starts, Fulton said: “We are expecting a slow steady recovery, and that is forming decisions we make in our home building business as well as wood products business, and our timberlands business.”

Chief Financial Officer Patty Bedient said that although overall market conditions continued to be difficult, “as we enter the new year, they’re much improved compared to a year ago.”

Weyerhaeuser said its net fourth-quarter loss was $175 million, or 83 cents per share, compared with a loss of $1.2 billion, or $5.73 per share, a year ago.

Net sales for the quarter dropped 16 percent to $1.46 billion, the Federal Way, Washington-based company said.

Excluding one-time items such as the alternative fuel credit and impairment and restructuring charges, Weyerhaeuser posted a loss of 52 cents per share.

By that measure, analysts had expected a loss of 38 cents per share and revenue of $1.371 billion, according to Thomson Reuters I/B/E/S estimates.

Weyerhaeuser has large timberland holdings in North and South America, builds homes, and produces packaging and various timber products. The company plans to convert into a real estate investment trust this year, a move that will cut its tax burden and give investors higher returns.

Looking ahead, the company said it expects a lower operating loss in the first quarter in its wood products business, due to improved operating rates and anticipated sales realization improvements for lumber and OSB, or particle board.

Weyerhaeuser sees operating earnings from the timberlands segment to be comparable to the fourth quarter primarily due to improved log sales realizations offset by higher costs.

For its cellulose fibers segment, Weyerhaeuser expects earnings from operations for the first quarter to be comparable to the fourth quarter, while in real estate it expects a profitable quarter.

But it said a loss is expected from single-family homebuilding operations due to seasonally lower closings.

In afternoon trading on the New York Stock Exchange, Weyerhaeuser stock was down $1.09, or 2.7 percent, at $39.30.

Reporting by Ernest Scheyder and Steve James in New York; additional reporting by Shailesh Kuber in Bangalore, editing by Dave Zimmerman and Gunna Dickson

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