Transcript: Weyerhaeuser Q1 2026 Earnings Conference Call

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Weyerhaeuser (NYSE:WY) held its first-quarter earnings conference call on Friday. Below is the complete transcript from the call.

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Summary

Weyerhaeuser Co reported first quarter GAAP earnings of $156 million on net sales of $1.7 billion, with adjusted EBITDA totaling $308 million, marking a 120% increase over the previous quarter.

The company completed the divestiture of non-core Timberlands in Virginia for $192 million and continued to focus on its wood products growth strategy, introducing new products such as Aerostrand and Propanel.

Weyerhaeuser Co expanded its distribution network, opening new locations in Billings, Montana and Gallatin, Tennessee, to support growth in underpenetrated markets.

Future outlook includes stable second-quarter earnings expectations, with continued focus on operational excellence and strategic growth initiatives, despite ongoing macroeconomic uncertainties.

Management highlighted challenges due to increased transportation and raw material costs and expressed optimism in long-term housing market fundamentals despite current headwinds.

Full Transcript

OPERATOR

Greetings and welcome to the Weyerhaeuser first quarter 2026 earnings conference call. At this time all participants are in a listen only mode. After the speaker’s remarks, there will be a question and answer session. To ask a question, please press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue. If anyone should require operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded. It is now my pleasure to introduce Andy Taylor, Vice President of Investor relations. Thank you Mr. Taylor. You may begin. Thank you. Good morning everyone. Thank you for joining us today to discuss Weyerhaeuser’s first quarter 2026 earnings. This call is being webcast at www.weyerhaeuser.com. Our earnings release and presentation materials can also be found on our website. Please review the warning statements in Our earnings release and on the presentation slides. Context concerning the Risks associated with Forward looking Statements as forward looking statements will be made during this conference call, we will discuss non GAAP financial measures and a reconciliation of GAAP can be found in the earnings materials on our website. On the call this morning are Devin Stockfish, Chief Executive Officer and Davey Wold, Chief Financial Officer. I will now turn the call over to Devin Stockfish.

Devin Stockfish (Chief Executive Officer)

Thanks, Andy. Good morning everyone and thank you for joining us. Yesterday, Weyerhaeuser reported first quarter GAAP earnings of $156 million, or 22 cents per share. On net sales of $1.7 billion, excluding special items, we earned $77 million or 11 cents per share. Adjusted EBITDA totaled $308 million, a 120% increase over the fourth quarter. These are solid results and I’d like to thank our teams for their continued focus and operational performance. Through their efforts, adjusted EBITDA improved across each of our business segments compared to the prior quarter, a notable achievement against a backdrop of elevated macroeconomic uncertainty. Before getting into the business results, I’ll provide a quick update on previously announced actions to optimize our portfolio. In February we completed the divestiture of non core Timberlands in Virginia for $192 million, and in April we received $22 million in proceeds following the transfer of our timber licenses in British Columbia to the buyer of our Princeton Mill. This represents the final proceeds associated with the Princeton transaction. I’ll also highlight some recent advancements associated with our wood products growth strategy. First, we were excited to preview two new products, AeroStrand and ProPanel, at the International Builder show in February. We’re committed to delivering products that meet the evolving needs of our customers, and these represent the first of many new and innovative products that we intend to introduce over the next several years. Feedback thus far has been overwhelmingly positive and we expect strong demand for both products as we bring them to market. And finally, we expanded our distribution footprint in the first quarter, opening a new location in Billings, Montana and announcing a new facility in Gallatin, Tennessee near Nashville, which will be operational by year end. Both sites support our strategy for continued growth of Weyerhaeuser’s proprietary products in strong and under penetrated markets. With these new facilities, our distribution Network expands to 22 locations and as we laid out at our Investor day, we see opportunities for additional growth through 2030. Turning now to our first quarter business results, I’ll start with Timberlands on pages six through nine of our earnings slides, excluding a special Item, Timberlands contributed $57 million to first quarter earnings. Adjusted EBITDA was $120 million, a 5% increase compared to the fourth quarter. In the west, adjusted EBITDA was $58 million, a $13 million increase over the prior quarter, largely driven by higher sales volumes and seasonally lower costs. Starting with the Western domestic market, log demand and pricing improved in the first quarter as mills responded to strengthening lumber prices and seasonally lower log supply. As a result, our average domestic sales realizations increased moderately compared to the fourth quarter. Our fee harvest volumes were slightly higher and per unit log and haul costs decreased as we made the seasonal transition to lower elevation and lower cost harvest operations. Forestry and road costs were seasonally lower. Moving to our Western export business, log markets in Japan were muted in the first quarter in response to ongoing consumption headwinds in the Japanese housing market. As a result, our customers finished goods inventories remained elevated and log prices decreased. Despite this dynamic, our customers remain well positioned relative to imported European lumber, which continues to face headwinds in the Japanese market. For the quarter, our average sales realizations for export logs to Japan were moderately lower and our sales volumes were moderately higher, largely due to the timing of vessels turning briefly to China. We remain in the early stages of re establishing our log export program to strategic customers in the region. However, our shipments have been limited to date, largely driven by ongoing weakness in the Chinese real estate sector and the seasonal slowing of construction activity around the Lunar New Year holiday. For the first quarter, we delivered one vessel to China which was comparable to the prior quarter. Turning to the south, adjusted EBITDA for Southern Timberlands was $62 million, a $7 million decrease compared to the fourth quarter. Despite improved pricing and takeaway of lumber. Southern sawlog markets remained subdued in the first quarter as log supply outpaced demand given drier than normal weather conditions. With respect to southern fiber markets, demand and pricing moderated in the first quarter as mills reduced consumption ahead of spring maintenance outages and in response to lower takeaway of finished goods. On balance, demand for our logs remained steady given our delivered programs across the region and our average sales realizations were comparable to the fourth quarter. Our per unit logging haul costs were also comparable and forestry and road costs were higher. Our fee harvest volumes were slightly lower in the first quarter. In the north, adjusted EBITDA was comparable to the fourth quarter turning now to Strategic Land Solutions on pages 10 and 11 as a reminder, this is the new name for our Real Estate, Energy and Natural Resources segment. Starting this quarter, we’re expanding our disclosure for this segment to three business Real Estate, Natural Resources, and Climate Solutions. The new name reflects our broadening scope and growth focus across these businesses, and the new reporting structure enhances the cadence of disclosure for our climate solutions activities. In the first quarter, Strategic land Solutions contributed $169 million to earnings. Adjusted EBITDA was $193 million, a $98 million increase compared to the fourth quarter. This reflects a very strong quarter for the segment, largely driven by the timing and mix of real estate sales and the completion of a $94 million conservation easement transaction in Florida. As we discussed last quarter, the conservation transaction conveyed approximately 61,000 acres of Weyerhaeuser timberlands to a larger wildlife corridor, restricting future development and protecting habitat for a variety of species. Notably, the easement allows Weyerhaeuser to retain ownership of the land for continued sustainable forest management. As for the rest of the segment, real estate markets have remained solid year to date, and we continue to capitalize on steady demand and pricing for HBU properties with significant premiums to timber value for the quarter. Our results reflect a sizable increase in real estate acres sold, which is a typical trend for this business. In the first quarter, our average price for real estate sales declined from the record level achieved last quarter, which benefited from several high value development transactions in South Carolina. Now moving to Wood products on pages 12 through 14. Excluding a special item, wood products contributed $14 million to first quarter earnings. Adjusted EBITDA was $71 million, a $91 million improvement compared to the fourth quarter, largely driven by an increase in lumber and OSB pricing. Starting with lumber first quarter, adjusted EBITDA was $27 million, an $84 million increase from the Prior Quarter the framing lumber composite strengthened in the first quarter as buyers work to replenish lean inventories into the spring building season but face supply constraints from previously enacted curtailments and closures. While this dynamic was felt across the North American market, it was most acute in southern yellow pine, which experienced a significant price increase during the quarter. For our lumber business, average sales realizations increased by 13% compared to the fourth quarter. Our production volumes increased as we returned to a more normal operating posture following market related production adjustments in late 2025. As a result, our sales volumes increased slightly and unit manufacturing costs were lower. Log costs were comparable to the prior quarter. Now turning to OSB, first quarter adjusted EBITDA was $3 million, a $13 million increase compared to the fourth quarter. OSB Composite pricing entered the year on an upward trajectory as demand improved slightly leading into the spring building season. By February, pricing stabilized and remained steady for the balance of the quarter. As a result, our average sales realizations increased by 8% compared to the fourth quarter. Our production and sales volumes were slightly lower, largely driven by temporary winter weather disruptions. Early in the quarter, unit manufacturing costs were slightly lower and fiber costs were slightly higher. Adjusted EBITDA for engineered wood products was $39 million, a $10 million decrease compared to the fourth quarter, primarily due to lower average sales realizations for most products and higher raw material costs, most notably for OSB Web stock. Our sales volumes for solid section products increased slightly while I joist volumes were comparable to the prior quarter. Unit manufacturing costs were also comparable. Although EWP sales volumes and pricing held up reasonably well, demand was softer than our initial expectations early in the first quarter. That said, we saw a slight uptick in order files in March, and we expect our sales volumes to increase seasonally in the second quarter. Moving forward, demand for EWP products will remain closely aligned with new home construction activity, particularly in the single family segment. In distribution, adjusted EBITDA improved by $7 million compared to the fourth quarter, largely due to higher sales volumes. With that, I’ll turn the call over to Davey to discuss some financial items and our second quarter outlook.