Owner of home builder Pardee posts strong quarter

Monday, July 26, 2004 | 10:51 a.m.

SUN STAFF AND WIRE REPORTS

SEATTLE -- Profit at Weyerhaeuser Co. more than doubled in the second quarter thanks to favorable markets for wood products, the company said Friday. Its shares rose more than 2 percent.

For the three months ended June 27, the Federal Way-based timber giant reported earnings of $369 million, or $1.57 per share, compared with $157 million, or 71 cents a share, for the same quarter a year ago.

Sales jumped to $5.89 billion from $4.93 billion in the year-earlier period.

Weyerhaeuser's home building operation, Pardee Homes, is a big player in the Southern Nevada building industry. The company said its higher profit was driven in part by the robust U.S. housing market and that its home building operation has a record order backlog.

Another Las Vegas builder, Meritage Corp., said earnings climbed 16 percent to $24.6 million or $1.77 a share. The company -- headquartered in both Arizona and Texas -- reported profit margin pressure in the Dallas and Las Vegas markets. Chief Financial Officer Larry Seay called the Las Vegas margin contraction a temporary blip due to a lack of inventory -- not a pullback in demand.

A third Las Vegas builder, Ryland Group Inc., said its net income jumped 42 percent to $76.5 million or $3.03 per share. Business was most robust in California, Las Vegas and Chicago, Ryland said.

Weyerhaeuser's results for the most recent quarter included two one-time charges totaling $24 million, or 10 cents a share, for a debt and legal issues.

Excluding those charges, Weyerhaeuser earned $1.67 a share. That easily beat the $1.13 a share consensus forecast by analysts polled by Thomson First Call.

Shares of Weyerhaeuser rose $1.32, or 2.3 percent, to $59.98 Friday on the New York Stock Exchange.

"Our record quarterly earnings reflect favorable market conditions for wood products and timberlands, combined with hard work by our employees to improve efficiency and streamline operations," said Steven R. Rogel, chairman, president and chief executive.

The firm said it expects to take advantage of strong market conditions in the current third quarter, but also noted that prices for lumber and structural panels may decrease.

For the six months ended June 27, Weyerhaeuser had profits of $490 million, or $2.13 cents per share, compared to $103 million, or 47 cents per share, for the same period last year. Sales increased from $9.5 billion to $10.9 billion.

Weyerhaeuser plans to sell about 304,000 acres of timber land in Georgia to four companies for a total of $404 million, the largest in a series of recent sales to reduce debt.

The buyers are Virginia Forest Investment LLC of Hogansville and Macon, Ga.; Georgia Fall Line Properties LLC of Greensboro, Ga.; Southern Timber Consultants LLC of Perry, Ga., and Copper Station Holdings No. 3 of Beaufort, S.C.