A healthy national housing market buoyed Weyerhaeuser Co. to lofty first-quarter profits, the company reported Friday.
Net earnings increased to $275 million, up from $167 million during the same period last year. Net sales were $1.9 billion, nearly $200 million more than the first quarter of 2017.
Strong lumber prices drove solid demand for logs, the company said.
Weyerhauser’s western timberlands delivered $165 million in earnings — $32 million more than the first quarter of last year.
The results are welcome news for the local economy, given that the company still employs several hundred workers here at its Longview sawmill and log dock, and within its timber operations.
“The housing market continues to grow at a healthy rate,” CEO Doyle Simons told investors Friday on an earnings call.
Total housing starts for the first quarter averaged 1.32 million units on a seasonally adjusted annual basis — the highest quarterly average since the second quarter of 2007, he noted.
Year-to-date housing starts have increased 8 percent, while permit activity increased 47 percent through February compared with a year ago.
“Builder confidence is high and our customers are reporting a strong start to the spring selling season supported by continued employment growth, rising wages, historically strong consumer confidence and growing participation by the millennial home buyer,” Simons said.
The company expects another 1.3 million total housing starts in 2018, with single family starts up nearly 10 percent.
The impact on earnings of the new federal tax law was not entirely clear, but the company paid only $17 million in corporate income tax this past quarter, down from $59 million a year earlier.
The company expects second-quarter earnings to be significantly higher than the same time a year ago, but approximately $25 million lower than this year’s first quarter due to normal seasonality.
Slightly higher log sales will likely be offset by higher logging costs and increased road and forestry costs.
Weyerhauser could return some profits to shareholders through an increased dividend, but it will also look at reinvesting new capital, Simon said.
“Our board will continue to regularly view opportunities to return cash to shareholders, and this may come in the form of a increased dividend, or as you pointed out, opportunistic share repurchases as appropriate,” he said. “Secondly, we’ll continue to invest in our businesses.”