Weyerhaeuser beats estimates as homebuilding business improves
Oct 25 (Reuters) - Timber conglomerate Weyerhaeuser Co reported a better-than-expected quarterly profit as margins improved in its homebuilding business, which it is looking to sell.
The company is in advanced talks to sell its homebuilding and real estate development unit for $2.7 billion to Tri Pointe Homes Inc, Reuters reported earlier this week, quoting sources familiar with the matter.
Weyerhaeuser, which said in June it was reviewing strategic options for the unit, said on Friday it expects "significantly" higher earnings from single-family homebuilding this quarter.
Closings for single-family homes are expected to increase to over 1,100 in the fourth quarter from 768 in the third quarter, the company said on Friday.
Weyerhaeuser said it expects higher average closing prices and selling-related costs at the business due to the additional closing volumes.
The business accounted for a fifth of the company's net profit in the third quarter.
The homebuilding industry in the United States is adjusting to a slowdown in new orders after seven consecutive quarters of strong demand as rising interest rates and economic uncertainty deter buyers.
The Dow Jones Home Construction index has lost a fifth of its value since May.
Weyerhaeuser's third-quarter net earnings rose to $157 million, or 27 cents per share, from $117 million, or 22 cents per share, a year earlier.
Net sales jumped 23 percent to $2.18 billion.
Analysts expected a profit of 21 cents per share on revenue of $2.09 billion, according to Thomson Reuters I/B/E/S.
PulteGroup Inc, the No. 2 U.S. homebuilder, reported higher third-quarter gross margins on Thursday, and said a slowdown in new home orders would be "short-lived" as Americans return to the market after a period of economic uncertainty.