An Ugly Quarter for Weyerhaeuser

Weyerhaeuser's fourth-quarter loss ballooned to more than $1 billion — a record — as the rapidly deteriorating U.S. housing market forced the timber and wood-products company to book a massive charge and write down other assets, according to reports by the Associated Press and the Seattle Post-Intelligencer newspaper.

The company, which builds houses and makes pulp and wood panels from trees it grows on more than 6 million acres, is facing a severe challenge. The company's wood products business, which makes boards to frame houses and wood panels for floors and roofs, booked a loss of $960 million. Its real estate business, which builds homes, fell to a loss of $630 million after a profit of $22 million in the year-earlier quarter.

The company Friday reported a loss of $1.21 billion, or $5.73 a share, in the three months ended Dec. 31. It reported a loss of $63 million, or 30 cents a share, in the year-earlier period.

"These results reflect the speed and severity of the deterioration of market conditions," Weyerhaeuser Chief Executive Dan Fulton said.

Earnings from the timberlands segment decreased 57 percent, something Fulton attributed to potential home buyers worrying about their falling incomes, or getting laid off, more than picking up bargain-priced houses.

New-home sales plummeted 14.7 percent in December to the slowest pace since 1963, the Commerce Department said late last month. The moribund U.S. housing market has pushed down lumber prices to their worst levels in more than 20 years, with home-building at its weakest since 1959. On top of that, construction slows during the cold months of the fourth quarter.

Weyerhaeuser in December said it would slash its quarterly dividend to 25 cents to hold on to cash and planned to cut this year's capital spending. Read the full report here or here.