North American forest products giant Weyerhaeuser delivered stronger second-quarter earnings as higher lumber prices lifted its Wood Products division, but the company warned that rising log costs and continued macroeconomic uncertainty are expected to weigh on profitability during the second half of the year.<\/p>\n
The company reported net earnings of $162 million, or $0.23 per diluted share, on sales of $1.87 billion. Excluding special items related to the sale of Oregon timberlands, adjusted net earnings reached $91 million, while Adjusted EBITDA totalled $310 million, broadly in line with the previous quarter but below the level recorded a year earlier.<\/p>\n
Lumber prices recover as Wood Products earnings improve<\/strong><\/p>\n The strongest improvement came from Weyerhaeuser's Wood Products business, where operating earnings increased to $71 million from $42 million in the first quarter.<\/p>\n The division benefited from a 15% increase in average lumber prices compared with the previous quarter, while lumber sales volumes also increased. Average realised lumber prices climbed from $443\/mbf in the first quarter to $508\/mbf in the second quarter, helping offset higher production costs and transportation disruptions experienced during the period.<\/p>\n The company also reported stronger results in oriented strand board (OSB), engineered wood products and its distribution business as demand improved across several product categories.<\/p>\n Rising log costs continue to pressure margins<\/strong><\/p>\n Despite the improvement in lumber markets, Weyerhaeuser acknowledged that raw material costs remain a significant challenge.<\/p>\n Log costs increased during the second quarter, while elevated fuel and freight expenses pushed harvesting and transportation costs higher across its timberlands operations. Looking ahead to the third quarter, management expects log costs to increase further for its lumber business, partially offsetting anticipated gains from higher production volumes and improved manufacturing efficiency.<\/p>\n The company also expects domestic western log demand to remain supportive, although export log volumes are projected to decline during the third quarter.<\/p>\n Timberlands supported by stronger domestic log markets<\/strong><\/p>\n Weyerhaeuser's Timberlands division generated Adjusted EBITDA of $123 million, slightly above the previous quarter.<\/p>\n In the U.S. West, domestic log sales volumes increased and average log prices improved, supported by stronger demand from regional sawmills. Harvest volumes also rose seasonally as operating conditions improved. In the U.S. South, harvest levels remained broadly stable, while realised log prices edged slightly higher due to changes in product mix.<\/p>\n Chief Executive Officer Devin Stockfish said the company was encouraged by the recent recovery in lumber and western log prices, even as broader economic conditions remain uncertain. He added that Weyerhaeuser continues to focus on operational efficiency, disciplined capital allocation and long-term value creation.<\/p>\n Third-quarter outlook remains cautious<\/strong><\/p>\n Despite stronger second-quarter results, Weyerhaeuser expects earnings from its Wood Products segment to soften modestly in the third quarter unless lumber prices continue improving.<\/p>\n Management forecasts higher lumber production and sales volumes, but also expects moderately higher log costs, reflecting continued pressure from raw material markets. Manufacturing costs are projected to ease slightly, while engineered wood products should benefit from marginally stronger pricing and demand.<\/p>\n Although North American lumber markets have improved compared with the beginning of the year, Weyerhaeuser's outlook illustrates the same challenge affecting many producers globally: recovering lumber prices are helping profitability, but expensive logs continue to absorb much of the benefit. As the industry enters the second half of 2026, the pace of housing activity and the direction of log prices will remain the two most important variables shaping sawmill margins.<\/p>","protected":false},"excerpt":{"rendered":" North American forest products giant Weyerhaeuser delivered stronger second-quarter earnings as higher lumber prices lifted its Wood Products division, but the company warned that rising log costs and continued macroeconomic uncertainty are expected to weigh on profitability during the second … Continue reading