Weyerhaeuser Earnings: Resilient Demand Is Not Enough to Offset Lower Lumber Prices

Weyerhaeuser reported first-quarter results that came with few surprises as lower lumber prices weighed heavily on its wood products business despite relatively stable production volumes. Revenue declined 40% year over year as weakness in Weyerhaeuser’s wood products business offset a solid quarter from the timberlands segment. Additionally, Weyerhaeuser reported a 12.5% consolidated operating margin, a steep decline compared with its 43% margin a year ago. We've decreased our fair value estimate to $35 from $38 due to our expectation of lower lumber prices through 2023 than we had previously anticipated.