(Reuters) - U.S. timber company Weyerhaeuser (NYSE:WY) posted a lower adjusted profit on Thursday, hit by weakness in its wood products business.
The Seattle, Washington-based firm reported an adjusted net profit of $121 million, or 16 cents per share, for the fourth quarter ended Dec. 31, which was lower than the $171 million, or 24 cents, reported in the prior year quarter.
The company said in October it expected lower sales in its wood products segment as cautious buyer sentiment due to a seasonal reduction in housing construction pressured Oriented Strand Board (OSB), a type of engineered wood, and lumber benchmark prices.
"Wood Products results highlighted the stark contrast between the favorability of the pricing backdrop in OSB and EWP, which delivered healthy margins, and lumber, where Weyerhaeuser was unprofitable in the quarter," said D.A. Davidson analyst Kurt Yinger.
Net sales in the wood products segment fell 2.2% to $1.30 billion from $1.33 billion, a year earlier.
Weyerhaeuser said it expected sales from the wood products segment to increase in the first quarter on higher sales volumes for lumber, OSB and other engineered wood products.
Net sales in the timberlands segment for the quarter were $534 million as compared to $548 million a year earlier.
Domestic sales volumes for the timberlands segment were lower and export volumes were higher as it focused on China to capture high-margin opportunities.