Weyerhaeuser beats estimates as homebuilding business improves

Reuters

Oct 25 (Reuters) - Timber conglomerate Weyerhaeuser Co reported a better-than-expected quarterly profit asmargins improved in its homebuilding business, which it islooking to sell.

The company is in advanced talks to sell its homebuildingand real estate development unit for $2.7 billion to Tri PointeHomes Inc, Reuters reported earlier this week, quotingsources familiar with the matter.

Weyerhaeuser, which said in June it was reviewing strategicoptions for the unit, said on Friday it expects "significantly"higher earnings from single-family homebuilding this quarter.

Closings for single-family homes are expected to increase toover 1,100 in the fourth quarter from 768 in the third quarter,the company said on Friday.

Weyerhaeuser said it expects higher average closing pricesand selling-related costs at the business due to the additionalclosing volumes.

The business accounted for a fifth of the company's netprofit in the third quarter.

The homebuilding industry in the United States is adjustingto a slowdown in new orders after seven consecutive quarters ofstrong demand as rising interest rates and economic uncertaintydeter buyers.

The Dow Jones Home Construction index has lost afifth of its value since May.

Weyerhaeuser's third-quarter net earnings rose to $157million, or 27 cents per share, from $117 million, or 22 centsper share, a year earlier.

Net sales jumped 23 percent to $2.18 billion.

Analysts expected a profit of 21 cents per share on revenueof $2.09 billion, according to Thomson Reuters I/B/E/S.

PulteGroup Inc, the No. 2 U.S. homebuilder, reportedhigher third-quarter gross margins on Thursday, and said aslowdown in new home orders would be "short-lived" as Americansreturn to the market after a period of economic uncertainty.

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