Weyerhaeuser profit more than doubles

Weyerhaeuser Co., the largest North American lumber producer, said Friday third-quarter profit more than doubled, benefiting from a gain on the sale of one of its businesses.

Net income rose to $280 million, or $1.33 a share, from $101 million, or 47 cents, a year earlier, as it recorded a $303 million gain from selling its industrial-packaging business to International Paper Co. Excluding the gain and other one-time items, the company had a loss of 1 cent a share, less than the 6- cent average estimate of analysts in a Bloomberg survey.

Chief Executive Officer Daniel Fulton sold businesses, fired workers and shut lumber mills as demand for building materials declined amid slowing U.S. housing construction. The pace of single-family home starts slumped to 544,000 in September, the fewest since November 1981.

``There's no question it's been a rough ride for this company,'' said Russell Croft, who helps manage about $600 million, including 247,000 Weyerhaeuser shares, at Croft Leominster Inc. in Baltimore. ``We still like the assets and management's focus on cost cutting and debt reduction.''

Weyerhaeuser, based in Federal Way, Washington, said revenue fell 25 percent to $2.1 billion. The decline partly reflected the $6 billion sale of the industrial-packaging business in August.

``Conditions remain extremely challenging in most Weyerhaeuser businesses,'' Mark Wilde, an analyst at Deutsche Bank Securities in New York, said in a note this month to clients.

Weyerhaeuser's operating loss on production of lumber, wood panels and other solid-wood products widened to $146 million, from a loss of $131 million a year earlier.

The real-estate business, which includes six homebuilding companies, had a loss of $316 million, compared with profit of $60 million, because of weak housing demand.

``Our sense is that home buyers need to regain some confidence that the financial markets are stable before they really start to show up and make a purchase,'' Fulton, 60, said Friday on a conference call with investors and analysts.

Earnings from the company's timberland holdings fell 34 percent to $107 million. Profit from the cellulose-fiber unit, which makes paper and absorbent consumer products such as disposable diapers, fell 1.3 percent to $78 million as chemical and freight costs rose.

``We're facing unprecedented conditions across the entire economy and we expect these conditions to continue,'' Fulton said on the call.