Sulja Bros. Building Supplies, Ltd (SLJB)

[greenspirit]

Chipl, check out this article from a few weeks ago. Makes me wonder if Weyerhaeuser might be selling off a few of its assets? Check out the sentence I highlighted.

Weyerhaeuser Q2 Profit Declines On Slowdown In Construction
http://www.tradingmarkets.com/.site/news/TOP%20STORY/317799/
Tuesday, July 25, 2006; Posted: 01:29 PM

(RTTNews) - Tuesday, Weyerhaeuser Co. (WY | charts | news | PowerRating), engaged in the growing and harvesting of timber, announced second quarter results, reporting earnings that declined from the prior-year period due to a slowdown in construction activity, which unfavorably impacted the lumber prices. However, earnings per share, including charges, though dropped from the previous year, came above analysts' consensus estimate. Additionally, the company said thanks to declining prices, it expects lower third quarter earnings from the timberlands and wood products businesses.

Federal Way, Washington-based Weyerhaeuser said second quarter earnings dropped to $314 million from $420 million reported in the year-ago period. On a per share basis, earnings declined to $1.26 from $1.71 in the prior year. On average, 16 analysts polled by First Call/Thomson Financial expected the company to earn $0.96 per share for the quarter.

The company noted that earnings of the most recent quarter includes a charge of $12 million or 5 cents per share, related to the restructuring of the Containerboard, Packaging and Recycling business model and a charge of $11 million or 4 cents per share, related to closure of facilities. Additionally, the quarter included a one-time tax benefit of $48 million or $0.19 per share, due to a change in Texas state income tax law, as well as a reduction in the Canadian federal income tax rate and a deferred tax adjustment related to the Medicare Part D subsidy.

In the prior-year quarter, earnings included a gain of $110 million or $0.45 per share, related to the sale of the company's operations in coastal British Columbia and a charge of $44 million or $0.18 per share, related to a planned repatriation of $1.1 billion of eligible Canadian earnings under the provisions of the American Jobs Creation Act of 2004. The company also recognized $37 million or $0.15 per share of a deferred gain from previous timberlands sales and incurred a charge of $12 million or 5 cents per share, related to the settlement of a linerboard antitrust lawsuit.

Total net sales and revenues edged down to $5.69 billion from $5.71 billion in the same period last year. Analysts had a consensus revenue estimate of $5.72 billion for the company in the just concluded quarter.

Revenue from Timberlands rose to $224 million from $210 million last year on higher log prices and the timing of portfolio improvement sales of non-strategic properties. Higher fuel prices increased operating costs in the West and South.

Cellulose Fiber and White Papers segment had revenues of $23 million, up from $16 million reported in the previous year. Containerboard, Packaging and Recycling revenues dipped to $74 million from $99 million recorded last year. Wood Products generated revenues of $131 million, compared to $204 million in the prior year. However, sequentially, revenue from the segment improved by $14 million due to seasonal increases in shipment volumes for all major product lines, in spite of a decline in residential construction activity.

Revenue from the Real Estate and Related Assets also declined in the just concluded quarter to $123 million from $156 million in the corresponding period last year. The company said number of single-family homes closed in the second quarter increased seasonally, compared to the prior quarter. Despite lower margins, single family earnings increased seasonally, but were offset by higher operating costs.

Weyerhaeuser expects third quarter earnings for the Timberlands segment to be lower than the second quarter due to seasonally reduced harvest and sales activity, softening domestic log prices as well as lower sales of non-strategic properties. The company anticipates substantially lower third quarter earnings, in comparison with the second quarter, from ongoing wood products operations as well due to declining prices. The company expects to recognize a gain on the sale of the North American composite mills during the third quarter.

For the six-month-period, the timber grower reported a net loss of $266 million or $1.08 per share, compared to earnings of $659 million or $2.69 per share. For the first half of the fiscal, total net sales and revenues edged down to $10.97 billion from $11.0 billion in the previous year.

The wood and box company company's cash and short-term investments as of March 26, 2006 was $105 million, while it was $113 million, as of June 25, 2006. Inventories for both periods were $2.05 billion and $1.91 billion, respectively.

Like its peers in the industry, Weyerhaeuser also is trying to face the tough market conditions caused partially by higher interest rates, which have hurt home building. The resultant sluggish demand, coupled with high costs, has prompted the company to seek avenues for cost cutting. It is closing mills and getting rid of businesses that no longer suits the prevailing mood in the industry. The company has sold off its composite mills business and is forming a new home building division. It is also considering the sale of its white papers business, which reported higher earnings for the most recent quarter.

Commenting on the company's performance, Steven Rogel, chairman, president and chief executive officer of Weyerhaeuser, said: "The recovery in the paper markets was welcomed after a period of challenging quarters for those businesses. At the same time, we can't rely on market conditions to improve our earnings performance. That's why we're being proactive and taking steps such as changing the business model of our integrated packaging business. This exciting initiative is starting to pay dividends and provides a glimpse into other changes we're making in how we go to market."

For the first quarter, the timber grower posted a net loss of $580 million or $2.36 per diluted share. Excluding the goodwill impairment of $746 million, the company earned $166 million or $0.67 per share. This compares with net earnings of $239 million, or $0.98 per diluted share. Net sales were relatively flat with the previous year at $5.4 billion.

MeadWestvaco Corp. (MWV | charts | news | PowerRating), a Stamford, Connecticut-based provider of packaging solutions and products, said on Monday that results for its second quarter ended June 30, 2006 would be affected by weather-related disruptions and by more pronounced shifts in customer ordering patterns at its Consumer & Office Products business as well as by certain corporate items. The company is expected to announce the results on August 1 before the market opens. Street looks for earnings of $0.32 per share on revenues of $1.62 billion.

International Paper Co. (IP | charts | news | PowerRating) is expected to announce second quarter results on August 1 before the market opens. Analysts have a consensus earnings estimate of $0.33 per share for the company on revenues of $5.80 billion.

Stock Movement

WY currently trades at $56.99, up $1.39 or 2.50% from the previous close, on 1.68 million shares. For the past one year, the company trended in the range of $54.25 - $75.50.

On July 24, Morgan Stanley downgraded Weyerhaeuser shares to "Equal-weight" from "Overweight" and lowered its price target to $67 from $81. The brokerage reduced its 2006 and 2007 EPS estimates for the company. Analyst Edings Thibault attributed the rating change to the company's unwillingness to maximize the value of its timberland resources. The analyst said the company's shares typically work best in a falling interest rate environment, which felt was unlikely to occur in the next several months. Subsequently, the brokerage lowered its 2006 EPS estimate to $3.80 from $4.32, and its 2007 estimate to $4.08 from $4.99. The company's stock hit the 52-week low on July 24.