Weyerhaeuser's profit drops on housing downturn

Forest products company Weyerhaeuser said Wednesday its third-quarter profit fell 26 percent as the downturn in the housing market drove wood-product prices and demand down sharply.

Profit fell to $211 million, or 85 cents a share, from $285 million, or $1.16 a share, a year ago. Revenue slipped 2 percent to $5.33 billion from $5.43 billion last year.

Analysts polled by Thomson Financial had expected a profit of 87 cents per share on $5.57 million in revenue. Still, Weyerhaeuser's stock gained, rising 72 cents to $64.45 in midday trading in New York.

"While anticipated, the housing-market decline was more abrupt and drove wood-products prices and demand into a deeper plunge than expected,"Steven Rogel, chairman, president and chief executive officer, said in a statement. "We are taking the necessary actions to match our production to demand and over the long-term, remain confident about the residential housing market."

The latest quarter included charges of $58 million, or 23 cents a share, related to the closure of a Canadian facility and asset impairments and costs related to facility closures or curtailments.

The charges were partially offset by a gain of $31 million, or 13 cents a share, from the sale of its North American composites business, and a gain of $15 million, or 6 cents a share, due to a reduction of the reserve for hardboard siding claims.

Last year's earnings included a gain of $75 million, or 31 cents a share, for the sale of MAS Capital Management Partners, a joint venture; a charge for closing facilities of $19 million, or 8 cents a share; and a loss of $14 million, or 6 cents a share, for the early repayment of debt.