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Will Weyerhaeuser Company's (WY) Q2 Earnings Surprise? - Analyst Blog

Weyerhaeuser Company WY is scheduled to report second-quarter 2015 results on Jul 31 before the market opens. The Zacks Consensus Estimate for the quarter is pegged at 20 cents per share.

The company delivered lower-than-expected results in two out of the four trailing quarters, while faring impressively in the rest. Average earnings surprise is a negative 1.39%. Last quarter, Weyerhaeuser’s earnings of 19 cents per share lagged the Zacks Consensus Estimate of 27 cents. Let us see how things are shaping up prior to this announcement.

Factors to Affect Q2 Results

Weyerhaeuser’s businesses are directly influenced by the housing market in the U.S. as well as that of the foreign countries served. In second-quarter 2015, new residential construction grew 22.1% in April, but fell nearly 11.1% in May. Operating conditions improved in July, with housing starts rising 9.8%.

Overall, prospects for the U.S. market look solid for the remaining quarters of 2015. Nevertheless, the easy availability of credits for home buying as well as buyer’s affordability to match pace with the rising prices remains a matter of concern.

We believe Weyerhaeuser’s Timberlands and Wood Products segments will gain from the gradual recovery in the U.S. housing market as well as timber supply shortage in Canada. However, lower realizations from Western logs, a decline in earnings due to disposition of non-strategic timberlands, reduced pulp sales realizations and higher maintenance expenses might adversely impact the company’s earnings in the second quarter.

Earnings Whispers

Our proven model does not conclusively show that Weyerhaeuser is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. That is not the case here as you will see below.

Zacks ESP: Weyerhaeuser currently has an ESP of 0.00% for second-quarter 2015. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 20 cents.

Zacks Rank: Weyerhaeuser currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

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

Quanex Building Products Corporation NX, with an Earnings ESP of +3.57% and a Zacks Rank #1.

Advanced Drainage Systems, Inc. WMS, with an Earnings ESP of +5.26% and a Zacks Rank #3.

Louisiana-Pacific Corp. LPX, with an Earnings ESP of +30.00% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WEYERHAEUSER CO (WY): Free Stock Analysis Report
 
ADV DRAINAG SYS (WMS): Free Stock Analysis Report
 
LOUISIANA PAC (LPX): Free Stock Analysis Report
 
QUANEX BLDG PRD (NX): Free Stock Analysis Report
 
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Zacks Investment Research