Weyerhaeuser Company (WY) Earnings & Analysis

Latest quarter

Weyerhaeuser reported Q2 revenue of $1.9 billion, above the $1.8 billion consensus. Its adjusted earnings of $0.13 per share also exceeded the $0.06 consensus estimate. Revenue was $1.9 billion in the year-ago quarter, with the reported year-over-year change at −0.90%.

The company reported diluted earnings of $0.23 per share, compared with $0.12 a year earlier. Gross margin was 16.7%, down from 17.3%, while operating margin rose to 11.9% from 9.45%. Free cash flow increased to $374.0 million from $289.0 million.

On the call, CEO Devin Stockfish said Wood Products adjusted EBITDA improved from the first quarter, largely because of higher lumber prices and sales volumes across its business lines, partly offset by higher costs. He said Strategic Land Solutions adjusted EBITDA fell sequentially, primarily because the first quarter included a conservation easement transaction.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Devin Stockfish said housing activity had been softer than Weyerhaeuser expected at the start of the year, citing affordability, consumer confidence and mortgage rates. In repair and remodeling, he said professional activity was holding up better than do-it-yourself work, with customers placing more emphasis on smaller projects that typically use less wood.

Stockfish said lumber prices rose in the second quarter as seasonal demand improved against supply constraints. He said limited trucking availability in the South left finished goods at several mills and prompted temporary production adjustments. CFO Davey Wold told an analyst that transportation difficulties were the largest factor in Weyerhaeuser’s approximately $20 million reduction to its second-quarter lumber guidance; he said the company had largely worked through those challenges.

Asked about inventories, Stockfish said lumber inventories across the channel were probably slightly below average, while oriented strand board (OSB) inventories were balanced. He said OSB supply remained more than adequate for demand. On the coming quarter, Wold expected higher lumber production and sales volumes and slightly lower unit manufacturing costs, but higher OSB manufacturing costs because of maintenance and resin expenses.

Stockfish said Weyerhaeuser’s second solar site began operating during the quarter and that three more developments were under construction. He also said the company had received permits for its first biocarbon facility and was positioning to begin construction in the fourth quarter.

Asked about the Monticello engineered wood facility’s budget, Wold said the project was on track to start in the first half of 2027 but faced labor, steel, concrete and tariff cost pressures. He said it was hard to say whether or by how much those pressures would increase the overall budget.

Guidance

In October, Weyerhaeuser lowered its full-year capital expenditure outlook to approximately $375 million from $400 million to $450 million, excluding the Monticello facility investment.

On the Q2 call, Wold raised the company’s full-year 2026 Strategic Land Solutions adjusted EBITDA outlook to approximately $450 million, an increase of $25 million from the prior guidance.