Weyerhaeuser falls 0.5% on Q4 miss; Wood Products segment negative EBITDA
EPS and revenue come in below estimates; lumber and OSB prices weigh
Weyerhaeuser shares slipped 0.5% on Thursday after the timberland REIT reported fourth-quarter results that missed expectations, with Wood Products posting negative Adjusted EBITDA as lumber and OSB prices declined. The company reported earnings per share of -$0.09 versus an estimated -$0.08, and revenue of $1.54 billion versus an estimated $1.66 billion, a 7.2% shortfall. Excluding special items, the company posted a net loss of $67 million, according to the company's earnings release.
The Wood Products segment's Adjusted EBITDA was -$20 million, reflecting lower market prices for lumber and oriented strand board (OSB). Management did not raise guidance, indicating that first-quarter performance is expected to be comparable to the fourth quarter. The stock traded at $25.93 with elevated volume following the announcement, according to market data.
Seattle-based Weyerhaeuser manages approximately 12.4 million acres of timberlands in the U.S. and holds licenses for an additional 14 million acres in Canada, operating as a vertically integrated timberland REIT with wood products manufacturing. The company's $18.9 billion market capitalization reflects its scale as one of the largest private owners of timberlands in North America, with recent market data showing a trailing twelve-month revenue of $7.07 billion and a dividend yield of 3.12%.
Weakness in lumber and OSB prices weighed on Wood Products during the quarter, a segment that typically provides more volatile earnings tied to housing starts and construction cycles. The negative Adjusted EBITDA for the segment highlights current pricing pressures rather than operating inefficiencies, given the company's integrated model that seeks to buffer commodity swings through its timberlands base.
Analysts maintain coverage on the stock, with recent analyst data indicating a median target price of $30.45 and ratings distribution including 'strong buy' and 'hold' designations. Forward valuation metrics, including a forward P/E of roughly 69x, suggest expectations for recovery as market conditions normalize. The company's balance sheet remains supportive, with a price-to-book ratio of 2.0 and substantial timberland assets providing long-term value backing.
The first-quarter outlook described as 'comparable' to the fourth quarter suggests limited near-term improvement in commodity pricing or demand conditions. Housing market activity and construction spending will be key drivers for Wood Products margins, while Timberlands' harvest levels and real estate transactions could provide additional offset. Investors will monitor lumber and OSB pricing trends and any commentary from management on demand signals from builders and distributors.
For now, Weyerhaeuser's dividend—recently paid at $0.83 per share—provides income support amid commodity price volatility, while its extensive timberland holdings offer a long-term hedge against inflation and exposure to real estate trends. However, until lumber and OSB markets show meaningful recovery, pressure on Wood Products earnings is likely to persist.