"Our Wood Products business reported its strongest quarterly earnings since 2005, as we effectively leveraged operational improvements in a strengthening housing market," said Dan Fulton, president and CEO. "Our shareholders are benefiting from this improved performance with the decision by our Board of Directors this month to increase our quarterly dividend by 18%."
Timberlands segment's earnings improved in the 1Q compared with the 4Q due to strong demand for Western logs, partially offset by a $17 million decrease in earnings from disposition of non-strategic timberlands. Selling prices for Western logs increased in export and domestic markets, and fee harvest volumes rose. Selling prices for Southern logs improved slightly, and fee harvest declined due to wet weather.
Wood Products segment's average price realizations for oriented strand board rose 24% compared with the 4Q, and lumber realizations increased 20%. Operating rates improved across all product lines due to stronger market demand and better mill operating performance. These factors were partially offset by higher raw material costs.
Cellulose Fibers segment's scheduled maintenance costs increased and pulp mill productivity declined due to a greater number of annual maintenance outage days and major maintenance projects. Fiber and energy costs increased, and average price realizations for pulp declined slightly.
Weyerhaeuser expects a slight profit from single-family homebuilding in the 2Q. Home closings should increase seasonally to approximately 600 single-family homes, with a slightly lower average closing price due to mix. Although input costs are rising, average margins should be comparable to the 1Q. The company anticipates higher selling-related expenses due to the additional closing volume.
Weyerhaeuser Company is one of the world's largest private owners of timberlands, began operations in 1900.