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In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.7% but net sales missed the same by 2.3%. Quarterly adjusted earnings and net sales for the quarter decreased 23.8% and 4.5%, respectively.
Weyerhaeuser’s earnings beat the consensus mark in three of the last four quarters and met on one occasion, with the average surprise being 18.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has declined to 22 cents from 25 cents over the past seven days. The estimated figure indicates a decrease of 31.3% from the year-ago level. The consensus mark for revenues is $2.01 billion, indicating a 0.6% year-over-year decline.
Weyerhaeuser's second-quarter 2024 performance is expected to have reflected the impact of modest single-family home construction and weak wood products pricing. Elevated mortgage rates have softened single-family home construction, which constitutes about 30% of the end-market demand for lumber, thus reducing housing demand. Additionally, wet weather in Texas and Florida, two key regions for single-family homebuilding, disrupted construction activity during the quarter. The repair & remodel (R&R) market, which represents around 40% of end-market demand for lumber, also experienced reduced demand, likely affecting the company's quarterly results.
Meanwhile, in June 2024, the company adjusted its Timberlands guidance. The company now expects second-quarter 2024 earnings for the segment to be "comparable" to first-quarter 2024 earnings, down from the previous expectation of "slightly higher" earnings. This reduction is primarily due to weaker domestic sales realizations in the Western region, linked to lower lumber prices.
We expect the Timberland segment net sales (which accounted for 29% of first-quarter net sales) to drop 5.3% year over year but grow 3.1% sequentially to $537.2 million. Adjusted EBITDA is expected to decline 15.7% from a year ago but up 0.6% sequentially to $144.9 million.
Additionally, Weyerhaeuser adjusted its forecast for the Wood Products segment. The company released updated lumber and oriented strand board (OSB) realizations as of Jun 21, 2024. Excluding changes in realizations, the company noted that earnings in its wood products segment would be $10 million higher sequentially. Previously, Weyerhaeuser had guided to "slightly higher" earnings.
Our model predicts Wood Products segment revenues (which accounted for approximately 72.5% of first-quarter 2024 revenues) to decline 0.7% year over year to $1,489.8 million in the quarter. Adjusted EBITDA is expected to decline 27.6% from a year ago but increase 6.2% sequentially to $195.4 million.
Meanwhile, in the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings to be approximately $10 million lower sequentially. Adjusted EBITDA is likely to be comparable with the prior quarter.
Our model predicts the Real Estate, Energy and Natural Resources segment (which accounted for 5.9% of first-quarter net sales) net sales to be $109.7 million, up 37.2% year over year and 2.6% sequentially. Adjusted EBITDA is expected to be up 33.9% from a year ago but down 0.3% sequentially to $93.8 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Weyerhaeuser this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, WY has an Earnings ESP of -3.67% and carries a Zacks Rank #5 (Strong Sell).
Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.
DY’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average surprise being 30.2%. Earnings for the to-be-reported quarter are expected to increase 7.4% from the year-ago quarter’s reported figure.
EMCOR Group (EME - Free Report) currently has an Earnings ESP of +4.76% and a Zacks Rank of 3.
EME’s earnings for the to-be-reported quarter are expected to grow 24.8% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 32%.
AAON, Inc. (AAON - Free Report) currently has an Earnings ESP of +0.94% and a Zacks Rank of 2.
AAON’s earnings for the to-be-reported quarter are expected to decline 1.8% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 9.7%.
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Weyerhaeuser (WY) to Report Q2 Earnings: What's in Store?
Weyerhaeuser Company (WY - Free Report) is slated to report second-quarter 2024 results on Jul 25, after the closing bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.7% but net sales missed the same by 2.3%. Quarterly adjusted earnings and net sales for the quarter decreased 23.8% and 4.5%, respectively.
Weyerhaeuser’s earnings beat the consensus mark in three of the last four quarters and met on one occasion, with the average surprise being 18.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has declined to 22 cents from 25 cents over the past seven days. The estimated figure indicates a decrease of 31.3% from the year-ago level. The consensus mark for revenues is $2.01 billion, indicating a 0.6% year-over-year decline.
Weyerhaeuser Company Price and EPS Surprise
Weyerhaeuser Company price-eps-surprise | Weyerhaeuser Company Quote
Factors to Note
Weyerhaeuser's second-quarter 2024 performance is expected to have reflected the impact of modest single-family home construction and weak wood products pricing. Elevated mortgage rates have softened single-family home construction, which constitutes about 30% of the end-market demand for lumber, thus reducing housing demand. Additionally, wet weather in Texas and Florida, two key regions for single-family homebuilding, disrupted construction activity during the quarter. The repair & remodel (R&R) market, which represents around 40% of end-market demand for lumber, also experienced reduced demand, likely affecting the company's quarterly results.
Meanwhile, in June 2024, the company adjusted its Timberlands guidance. The company now expects second-quarter 2024 earnings for the segment to be "comparable" to first-quarter 2024 earnings, down from the previous expectation of "slightly higher" earnings. This reduction is primarily due to weaker domestic sales realizations in the Western region, linked to lower lumber prices.
We expect the Timberland segment net sales (which accounted for 29% of first-quarter net sales) to drop 5.3% year over year but grow 3.1% sequentially to $537.2 million. Adjusted EBITDA is expected to decline 15.7% from a year ago but up 0.6% sequentially to $144.9 million.
Additionally, Weyerhaeuser adjusted its forecast for the Wood Products segment. The company released updated lumber and oriented strand board (OSB) realizations as of Jun 21, 2024. Excluding changes in realizations, the company noted that earnings in its wood products segment would be $10 million higher sequentially. Previously, Weyerhaeuser had guided to "slightly higher" earnings.
Our model predicts Wood Products segment revenues (which accounted for approximately 72.5% of first-quarter 2024 revenues) to decline 0.7% year over year to $1,489.8 million in the quarter. Adjusted EBITDA is expected to decline 27.6% from a year ago but increase 6.2% sequentially to $195.4 million.
Meanwhile, in the Real Estate, Energy and Natural Resources segment, Weyerhaeuser expects earnings to be approximately $10 million lower sequentially. Adjusted EBITDA is likely to be comparable with the prior quarter.
Our model predicts the Real Estate, Energy and Natural Resources segment (which accounted for 5.9% of first-quarter net sales) net sales to be $109.7 million, up 37.2% year over year and 2.6% sequentially. Adjusted EBITDA is expected to be up 33.9% from a year ago but down 0.3% sequentially to $93.8 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Weyerhaeuser this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, WY has an Earnings ESP of -3.67% and carries a Zacks Rank #5 (Strong Sell).
Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.
Dycom Industries (DY - Free Report) currently has an Earnings ESP of +4.43 and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DY’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average surprise being 30.2%. Earnings for the to-be-reported quarter are expected to increase 7.4% from the year-ago quarter’s reported figure.
EMCOR Group (EME - Free Report) currently has an Earnings ESP of +4.76% and a Zacks Rank of 3.
EME’s earnings for the to-be-reported quarter are expected to grow 24.8% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 32%.
AAON, Inc. (AAON - Free Report) currently has an Earnings ESP of +0.94% and a Zacks Rank of 2.
AAON’s earnings for the to-be-reported quarter are expected to decline 1.8% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 9.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.