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Weyerhaeuser (WY) to Report Q2 Earnings: Is a Beat in Store?

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Weyerhaeuser Company WY is scheduled to report second-quarter 2018 results on Jul 27, before the market opens.

The wood-based building products manufacturer delivered better-than-expected results in three of the last four quarters, the average positive earnings surprise being 2.76%. Notably, in the last reported quarter, the company’s earnings of 36 cents per share beat the Zacks Consensus Estimate of 33 cents.

Let us see how things are shaping up for Weyerhaeuser prior to the upcoming announcement.

Factors Influencing Q2 Results

Strength in U.S. housing market is expected to boost Weyerhaeuser's results in the to-be-reported quarter. This, along with higher demand for repair and remodeling activities, is expected to drive the company’s Wood Products and Timberlands segments in the upcoming quarterly results.

For the second quarter, earnings in the Wood Products segment are projected to grow sequentially and the same for the Timberlands segment is expected improve on a year-over-year basis.

For the Real Estate, Energy and Natural Resources segment, the company anticipates sequentially comparable earnings and adjusted EBITDA. Weyerhaeuser projects sequentially lower earnings and adjusted EBITDA from the Timberlands segment.

Sales volume and operating rates are predicted to be seasonally higher in the upcoming quarterly results. Sales realizations will rise for lumber, engineered wood products and oriented strand board.

However, the company predicts that higher road and forestry costs as well as rise in log costs will affect Timberland segment's business in the West. Log and haul costs will increase due to the planned shift of harvest activity to higher elevations in the spring months. In the South, log sales realizations are predicted to be flat on a quarter-over-quarter basis.

Overall, the Zacks Consensus Estimate for second-quarter 2018 revenues is pegged at $1.99 billion, reflecting an increase of 10.3% year over year. Meanwhile, the consensus estimate for earnings is pegged at 41 cents, implying growth of 46.4% on a year-over-year basis.

Earnings Whisper

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP of Weyerhaeuser is +2.44%.

Zacks Rank: Weyerhaeuser currently carries a Zacks Rank of #2.

The combination of Weyerhaeuser’s Zacks Rank #2 and +2.44% ESP makes us confident about an earnings beat in the quarter to be reported.

Weyerhaeuser Company Price and EPS Surprise

 

Weyerhaeuser Company Price and EPS Surprise | Weyerhaeuser Company Quote

Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some other companies in the industry you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Boise Cascade BCC has an Earnings ESP of +14.97% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Louisiana-Pacific Corporation LPX has an Earnings ESP of +8.62% and a Zacks Rank #1.

Potlatch Corporation PCH has an Earnings ESP of +7.61% and a Zacks Rank #1.

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