West to benefit most from housing rebound, Weyerhaeuser chief says
By MATEUSZ PERKOWSKI
The Weyerhaeuser Co. reports that timberlands in the West are in a better position to benefit from the housing recovery than those in the South.
Log demand has rebounded more in the West because the region was able to capitalize on healthy exports to the Pacific Rim even before domestic usage improved, said Dan Fulton, the firm's CEO.
"The contrast between Western and Southern markets is dramatic," said Fulton during a conference call with analysts.
The company owns or leases about 2 million acres of forest in the Pacific Northwest and about 4 million acres in several southern states, according to a financial document filed with the U.S. Securities and Exchange Commission.
Despite its bigger land holdings in the South, that region accounted for only $61 million in log sales during the first quarter of 2013, compared to $177 million for the West.
As the housing market continues to improve, Weyerhaeuser expects the trend to lift the economic outlook of Southern timberlands as well, Fulton said.
"We're clearly on the path to recovery," he said, noting that the "entire industry is in the process of going back to work."
Weyerhaeuser has reported that its total sales -- including logs, wood products, pulp and real estate -- increased more than 30 percent in the first quarter of 2013, to $1.95 billion, compared to last year.
At $144 million, profits were more than three times higher compared to the first quarter of 2012, when the company reported $41 million in net income.
Weyerhaeuser attributes most of the revenue increase to larger sales volumes and higher prices for lumber, oriented strand board and plywood.
The company's real estate development operations give it a inside view of the housing market, and if its competitors are seeing similar successes, then the future bodes well for timber and wood products, Fulton said.
"Our inventory of completed but unsold homes continues to fall," he said.