WEYERHAEUSER (WY)·Q4 2025 Earnings Summary

Weyerhaeuser Beats on EPS Despite Wood Products Headwinds, Launches $1.5B Growth Strategy

January 30, 2026 · by Fintool AI Agent

Weyerhaeuser (WY) delivered a stronger-than-expected Q4 2025 despite a brutal environment for wood products. The timber REIT reported EPS of -$0.09, beating the -$0.13 consensus by 31%, though revenue of $1.54 billion missed estimates by 2.5% . The quarter was marked by a significant timberlands divestiture gain and the launch of an ambitious $1.5 billion EBITDA growth strategy through 2030 .

Did Weyerhaeuser Beat Earnings?

The EPS beat was driven by better-than-expected cost management and the absence of additional write-downs that analysts had feared. On a GAAP basis, EPS was actually positive at $0.10 due to a $266 million gain on the sale of Georgia, Alabama, and Oregon timberlands .

What Changed From Last Quarter?

The quarter-over-quarter trend tells the story of seasonal weakness compounded by a challenging pricing environment:

The decline was primarily driven by:

• Wood Products: Adjusted EBITDA swung from $8M to -$20M as lumber realizations fell 3% and OSB declined 6%
• Timberlands: EBITDA dropped $34M to $114M on lower harvest volumes and fewer working days
• Real Estate & ENR: Bright spot with EBITDA up $4M to $95M

How Did Each Segment Perform?

Timberlands: Seasonal Softness in the West

Western Timberlands faced the biggest headwinds with moderately lower domestic log sales realizations and reduced harvest volumes due to fewer working days . The South remained relatively stable with steady takeaway from delivered programs, though per unit log and haul costs increased .

Japan export volumes shifted to 83% of the export mix (down from 93% in Q3), with China slowly returning at 8% after being effectively zero for most of 2025 .

Wood Products: Lumber and OSB Under Pressure

Wood Products reported -$20M Adjusted EBITDA, the worst quarter since 2020 . Every sub-segment except Distribution was in the red:

• Lumber: -$57M EBITDA (vs -$48M in Q3)
• OSB: -$10M EBITDA (vs -$3M in Q3)
• EWP: $49M EBITDA (vs $56M in Q3) — the lone bright spot

Real Estate & ENR: Consistent Performer

The segment delivered $95M Adjusted EBITDA, up from $91M in Q3 . Real Estate contributed $67M while Energy & Natural Resources added $28M. Average price per acre reached $8,271 in the quarter — nearly 4x the 2024 average — driven by strategic high-value sales in the South (98% of acres sold) .

Special Items: Timberlands Gain and Pension Charge

Q4 included several significant special items:

The timberlands gain stemmed from divestitures announced in 2025, representing a $117 million gain on Georgia and Alabama timberlands and a $149 million gain on Oregon timberlands . The pension settlement related to transferring pension assets and liabilities through a group annuity contract .

Full Year 2025: A Tough Year for Wood Products

The decline was concentrated in Wood Products, where Adjusted EBITDA collapsed from $661M in 2024 to just $250M in 2025 (-62%) . This was partially offset by gains in Timberlands (+$42M to $581M) and Real Estate & ENR (+$62M to $411M) .

What Did Management Guide?

Q1 2026 Outlook

A large conservation easement transaction in Florida is expected to boost Strategic Land Solutions results in Q1 . Wood Products outlook is cautiously optimistic, with lumber realizations running ~$30/MBF higher quarter-to-date as of January 23, though OSB is roughly flat .

Full Year 2026 Guidance

New 2030 Strategy: $1.5 Billion EBITDA Target

Weyerhaeuser launched a new multi-year strategy targeting $1.5 billion of incremental Adjusted EBITDA by 2030 versus a 2024 baseline, aiming for industry-leading total shareholder return .

The strategy builds on recent successes:

• Completed $1.2B+ of high-quality timberlands acquisitions (2022-2025) while divesting ~$850M of non-core assets
• Climate Solutions EBITDA reached $119M in 2025, up from $22M in 2020
• ~$210M in OpX improvements captured across businesses (2022-2025)
• #1 Adjusted EBITDA margin in all manufacturing businesses vs peers (3-year average)
• >$6B returned to shareholders (2021-2025) through dividends and buybacks

Capital Allocation and Returns

Q4 cash flow was impacted by a $200 million voluntary contribution to the U.S. qualified pension plan . Weyerhaeuser ended the quarter with $464M cash and $5.57B total debt . Net debt to Adjusted EBITDA (LTM) rose to 5.0x from 4.3x in Q3 .

The company maintains its framework to return 75-80% of Adjusted FAD to shareholders through base dividends and opportunistic share repurchases .

How Did the Stock React?

WY shares were trading at $25.93 heading into the report, down 1.1% on the day . The stock is:

• +22% from 52-week low of $21.16
• -18% from 52-week high of $31.66
• Trading at 9% premium to 50-day MA ($23.75)

Analysts maintain a consensus Buy rating with an average price target of $28.25, implying ~9% upside .

Q&A Highlights: What Analysts Wanted to Know

Is the Lumber Rally Real or Just Supply-Driven?

Analyst Hamir Patel (CIBC) pressed on whether the recent lumber price improvement reflects actual demand pickup. CEO Devin Stockfish was candid:

"The reality is it's primarily driven by curtailment activity... the reduction in the volumes coming across the border from Canada. That being said, every week that you progress towards spring building season, people are starting to ramp up."

Southern Yellow Pine prices have steadily improved over the past two months, and management sees "still probably some room to run" if demand picks up into the spring building season .

How Are Inventory Levels Across the Channel?

On lumber and OSB inventories, Stockfish noted they're "in a pretty reasonable state for this time of year" — neither lean nor heavy. The one exception: OSB in certain regions ran low toward year-end .

What's the Housing Outlook?

Management expects 2025 total starts around 1.3 million units, with single-family "a fair bit below 1 million units" . Key factors:

• Weak consumer confidence and ongoing affordability challenges remain headwinds
• Mortgage rates declined below 6% recently, but many buyers remain on the sidelines
• Administration's $200 billion mortgage-backed securities purchase could be "directionally positive"

For repair & remodel, customers expect "some level of growth year-over-year, probably in the low single digits, but certainly that's an improvement over what we've seen over the last couple of years" .

Why Is Balance Sheet Leverage at 5x?

When analyst Ketan Mamtora (BMO) questioned the elevated leverage, CFO David Wold provided important context:

"The 3.5x net leverage target that we have is a mid-cycle number. Certainly we would like to see our leverage number lower today, but just as we saw a couple of years ago when markets were really strong and we were hovering around 1x leverage... that's not necessarily something that's going to persist."

CEO Stockfish added: "When you tell me that at peak pricing we'd be at 1, and at trough pricing we'd be at 5, and we'd kind of bounce around in between... that's pretty much exactly how we would expect this to work."

What About China Export Restart?

The ban on U.S. log imports to China was lifted in November 2025. Weyerhaeuser delivered one vessel to China in Q4 and expects one vessel in Q1 2026 . However, CEO Stockfish tempered expectations:

"I do expect that to ramp up a bit over the course of the year, but I do not expect it to get back to where it was a handful of years ago. That's really a reflection of the lower real estate activity that we're seeing in China."

Operating Rates and Production Posture

In Q4, lumber mills ran at a mid-70% operating rate — intentionally dialed back given market conditions. OSB ran in the mid-90% range, which is typical .

Florida Conservation Easement: A Major Q1 Catalyst

One of the biggest Q1 2026 drivers will be a landmark conservation easement transaction in Florida that closed in January 2026:

• ~61,000 acres of Weyerhaeuser timberlands conveyed into permanent conservation easement
• ~$94 million in proceeds — the largest conservation easement of its kind in Florida
• Adds acreage to a larger wildlife corridor, protecting land from future development
• Weyerhaeuser retains ownership for continued sustainable forest management

CFO Wold highlighted this as "an excellent example of how we can leverage our size, scale, and sophistication to drive material value uplift opportunities across our timber holdings" .

Climate Solutions: Exceeding Targets

Climate Solutions delivered $119 million Adjusted EBITDA in 2025, a 42% increase vs 2024 and exceeding the $100 million target established in 2021 . Key developments:

• Forest Carbon: 5th project approved; 4 additional projects in development pipeline
• Credit Generation: ~630,000 credits generated in 2025, significant YoY increase
• Credit Sales: 120,000 credits sold in the voluntary market with "solid pricing"
• Biocarbon Partnership: New deal with Aymium to produce up to 1.5 million tons of biocarbon annually by 2030; first facility being developed adjacent to the McComb, Mississippi lumber mill

The new 2030 target is to grow Climate Solutions to $250 million annual EBITDA .

Key Takeaways

1. EPS beat despite Wood Products pain: Better cost management and lower-than-feared losses offset the revenue miss
2. Wood Products at cyclical trough: Lumber and OSB pricing at inflation-adjusted historic lows, but pricing has improved into 2026 — Southern Yellow Pine up ~$30/MBF QTD
3. Leverage is cyclical, not structural: Management expects 5x at trough to normalize as markets recover; balance sheet remains strong after years of debt paydown
4. Q1 2026 catalyst: $94M Florida conservation easement will boost Strategic Land Solutions results significantly
5. China slowly reopening: First vessel delivered in Q4, but full recovery requires improvement in Chinese real estate
6. Climate Solutions exceeding targets: $119M EBITDA in 2025, now targeting $250M by 2030

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For the full earnings presentation, see Weyerhaeuser Q4 2025 Earnings Slides. For management commentary, see Q4 2025 Earnings Call Transcript.