Timber company Weyerhaeuser reported better-than-expected quarterly earnings on Friday, as strength in its packaging products business helped offset weak demand for wood products from U.S. home builders.
Excluding items, the No. 2 U.S. timber and forest products company earned 48 cents a share in the latest quarter, well above Wall Street's expectations of 40 cents a share, according to Reuters Estimates.
However, Weyerhaeuser's second-quarter net earnings tumbled to $32 million, or 15 cents a share, from $298 million, or $1.19, a year earlier on weak prices for lumber products and a lower profit margin from its real estate business.
Quarterly sales fell 11% to $4.33 billion, the Federal Way, Washington-based company said. Analysts, on average, had forecast revenue of $4.21 billion.
The U.S. housing market has been grappling with a major slump. Home-builder sentiment in July reached its lowest mark since 1991, building permits in June fell to their lowest rate in 10 years and existing home sales reached a four-year low in May.
The company, which also builds homes, said single-family home closings increased slightly over the first quarter but average sales prices and margins continued to decline due to the weak housing market.
Weyerhaeuser said it expects third-quarter earnings from its real estate segment to be lower than those in the second quarter.
The company's shares, which were up $1.98, or 2.9%, at $70.71 in early Friday trading on the New York Stock Exchange, have fallen 16.1% over the last three months, tracking a 12% drop in the Standard & Poor's Paper and Forest Products Index.