Weyerhaeuser Co, a century-old producer of forest products, reported its highest revenue in more than four years, adding heft to recent government data showing that a recovery in the U.S. housing market has taken hold.
Fourth-quarter revenue rose 25 per cent to $2-billion (U.S.) – best since the third quarter of 2008 – and the company said it expected significantly higher current-quarter earnings in its wood products business, its largest.
The business, which sells lumbers and structural panels to residential and light commercial markets, had net revenue of $832-million in the December quarter. About 21 per cent of the company's pretax earnings of $182-million came from the business.
Chief Executive Dan Fulton said the recovering housing market helped Weyerhaeuser improve its profit and raise dividend last year, and that the company would look to build on that.
Housing starts rose 12.1 per cent last month to their highest level since June 2008, a report from the U.S. Commerce Department showed last week. Permits for future home construction were also the highest in about 4-1/2 years.
The recovery in the housing market has already helped Weyerhaeuser, with its shares jumping 58 per cent over the past year. It has a market value of about $17-billion. Rival Plum Creek Timber Co Inc's shares rose 21 per cent.
Weyerhaeuser, starting out as Weyerhaeuser Timber Co in 1900 when Frederick Weyerhaeuser and 15 partners bought 900,000 acres of timberland, now owns or controls more than 6 million acres, mainly in the United States, and manages another 14 million acres under long-term licenses in Canada.
Its net income for the fourth quarter more than doubled to $143-million, or 26 cents per share, from $65-million, or 12 cents per share, a year earlier. Gross margin rose 41 per cent to $420-million.
Analysts had expected a profit of 21 cents on revenue of $1.82-billion for the Federal Way, Washington-based company, according to Thomson Reuters I/B/E/S.