Weyerhaeuser Co Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Susan Maklari - Goldman Sachs Group Inc - Analyst : Thank you. Good morning, everyone. My first question is on -- good morning, everybody. I want to talk a bit about how you're thinking of lumber and OSB capacity, appreciating the comments around fact that your lumber production will be 10% sequentially lower in the fourth quarter and expectations that housing activity could pick up as we get into the spring. But I guess, as we think about what the builders are telling us, especially the big publics, that they're going to slow start late this year -- and that sounds like it could hold into early 2026 as well -- how are you thinking about the potential for further capacity to come out of your business? What are you watching for, for signs to determine if that's necessary? And how are you thinking about balancing the near term and the initiatives that you've put through with OpEx, which are obviously coming together and allowing, perhaps, for some share gains relative to the longer-term demand outlook?

Question: Susan Maklari - Goldman Sachs Group Inc - Analyst : Yeah. Okay. I appreciate all those comments. And then maybe turning to the Timberlands side of the business, it's nice to see the acquisitions and some of those sales that you announced this quarter that will be coming through. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 2:00PM, WY.N - Q3 2025 Weyerhaeuser Co Earnings Call I guess, as you think about your Timberlands portfolio and having reached the goals that you have set for yourself at the last Investor Day, how are you thinking about the positioning today? What should we expect going forward? And can you talk a bit about how you're thinking of the general footprint there?

Question: Susan Maklari - Goldman Sachs Group Inc - Analyst : Okay. Thank you for the call, and good luck with the quarter.

Question: George Staphos - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, everyone, and good morning. Thanks for all the details. I appreciate the commentary and taking my question. So I wanted to dig in a little bit more into the portfolio transaction you made in Timberlands. Devin, what do you think the net cash generation has been benefited by the acquisitions relative to the divestitures? What do you think the sort of cash flow, if you had to look at it per acre, has benefited just across -- what your -- you sold relative to what you gained?

Question: George Staphos - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Thanks, Davie. I guess, my other question would be aimed at lumber, in particular, so again, recognizing that you are low on the cost curve and you have the higher margins in the sector from what we can see. Nonetheless, black at the bottom was born from kind of an absolute need way back when coming out of the crisis to improve the cash flow kind of irrespective of what everybody else was doing, where you're at and recognizing there's been a lot of progress. When we look at EBITDA losses this quarter versus, I guess, last year's third quarter, pricing was about the same. But the EBITDA loss was a bit further. What -- and maybe we'll talk more about this at the Analyst Day. But what are you doing to lower cost and try to get to a breakeven at these very, very labored, if you will, price levels for lumber? Thanks so much.

Question: George Staphos - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Devin, if I could just -- if prices held at these levels -- and we recognize why they can't because of where prices are for everybody in the fourth quartile and so on. But let's assume, just for instance, that prices held at these levels. Would you be able to, within the course of a year or two years through whatever actions and things that you know you have on your whiteboard, to actually get to a breakeven level on a cash basis? Thanks so much, and good luck in the quarter.

Question: George Staphos - Bofa Merrill Lynch Asset Holdings Inc - Analyst : All right. Thanks so much.

Question: Anthony Pettinari - Citibank Cameroon SA - Analyst : Good morning. When we look at leverage net debt to EBITDA at 4.3 times, I know that's backwards looking on what should be kind of trough Wood Products earnings. But I'm just -- if we do have a more muted year in '26, like it seems like we have had in '25, can you just talk about kind of guardrails on leverage, the levers that you can pull, potentially delever capital allocation priorities maybe in -- if we kind of imagine maybe a bit of a tougher scenario in '26, or just generally, kind of how you think about that given what's kind of optically at least elevated leverage?

Question: Anthony Pettinari - Citibank Cameroon SA - Analyst : Okay. That's helpful. And then your two public timber REIT peers are combining into one company. And I'm not asking you to comment on competitors. But I'm just wondering if you can share any thoughts on the consolidation we've seen in the timber space over the years. Maybe you can remind us how much you actually face off against Potlatch and Rayonier in your local markets? And if public timber REITs are moving, I guess, to Coke and Pepsi, like how should investors think about Weyerhaeuser's relative value proposition?

Question: Anthony Pettinari - Citibank Cameroon SA - Analyst : Okay, that's very helpful. I'll turn it over.

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Thank you. First, a small one, maybe leads into a bigger one. So on the HBU, you had pointed out that prices have been rising over the course of this year. Is that a function of just the mix of what you're selling? Or is it that you're seeing higher pricing for like properties than you were before?

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Okay. Great. And then also, I hear you on the buying and the selling of timberlands and how optimizing the portfolio is very, very beneficial; makes total sense. At the same time, it's very interesting that the per acre -- at least to me, the per acre values that we're seeing as well as the multiples of cash flow that you were relaying, are as high as they are, if anything, it does seem like Timberland values. Like, HBU in the private market transaction seems to be trending higher, too. And obviously, your stock hasn't fared as well; lots of other variables at play. But does that color your appetite to be more aggressive on the sell side than on the buy side? And also, as you've gone out, particularly and sold some acreage, is your sense that there's a fair bit of money still looking to be deployed in the Timberland space. Kind of color on that would be great.

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : That's helpful. And speak to maybe just one quick follow-on. Given that is the case, it would seem that that discrepancy between how the public markets are valuing your stock, recognizing it's tough times in Wood Products and that's certainly playing a role, but are there other things that you're contemplating to help bridge at least what is a temporary-seeming very, very wide gap between NAV and where the stock trades? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 2:00PM, WY.N - Q3 2025 Weyerhaeuser Co Earnings Call

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Okay. Thanks, guys.

Question: Kurt Yinger - DA Davidson & Co - Analyst : Great. Thanks. I think Mark had a lot of good questions there. But maybe just dovetailing and trying to kind of wrap it up like, Davie, you talked about remaining kind of active from a portfolio management perspective. Does that mean that we should expect that you guys will remain acquisitive going forward? Or -- just help me understand kind of that balance between being a buyer versus maybe a net seller looking ahead.

Question: Kurt Yinger - DA Davidson & Co - Analyst : Okay. Switching gears to the Wood Products side, a little bit surprising to see the EWP realizations up a bit in Q3. It sounds like you're expecting pricing to be stable in Q4. Is there anything temporarily benefiting that? I mean, it seems to kind of diverge at least from what we've heard around the market. And how are you thinking about kind of overall competitive dynamics and what you're seeing out there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 2:00PM, WY.N - Q3 2025 Weyerhaeuser Co Earnings Call

Question: Kurt Yinger - DA Davidson & Co - Analyst : Okay, got it. Appreciate the color. Thank you.

Question: Ketan Mamtora - Bank of Montreal - Analyst : Thank you. Good morning, and thanks for taking my question. Maybe to start with -- on the Timberlands side, particularly in the US South, we've seen a lot of pressure on pulpwood prices here in the last four to six quarters. I mean, these are kind of multi-decade lows right now. Some of it is sort of cyclical weakness. But we've also seen a lot of pulp and paper mill shutdowns, which it seems like kind of will be hard to reverse here. So can you sort of talk to kind of what you guys are seeing out there on the pulpwood side? And how you -- at least in your sort of wood baskets, what can you do to help mitigate some of that? I guess, the engineered wood plant that you're building will help. But anything outside of that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 2:00PM, WY.N - Q3 2025 Weyerhaeuser Co Earnings Call

Question: Ketan Mamtora - Bank of Montreal - Analyst : Got it. No, that's helpful. And then switching here to sort of capital allocation, obviously, a lot of discussion here on the call around both acquisitions and divestitures in Timberlands. I'm curious on the downstream side, given how extended the downturn has been in lumber, would that be sort of an area of interest from an inorganic growth standpoint for Weyerhaeuser?

Question: Ketan Mamtora - Bank of Montreal - Analyst : Got it. No, that's helpful. I'll turn it over. Good luck.

Question: Hamir Patel - CIBC World Markets Corp - Analyst : Hi. Good morning. Davie, I was just wondering how you think about the opportunity to grow Southern pine log exports. China's cut off, but what sort of opportunity do you see in India over time?

Question: Hamir Patel - CIBC World Markets Corp - Analyst : Fair enough. That's all I had. I'll turn it over. Thanks.

Question: Matthew McKellar - RBC Capital Markets Inc - Analyst : Good morning. Thanks for all the great details so far. Just two quick questions on Japan for me. First, should that inventory destocking phenomenon

Question: Matthew McKellar - RBC Capital Markets Inc - Analyst : Thanks very much. I'll turn it back.

Question: Hong Zhang - JPMorgan Chase & Co - Analyst : Yeah, hey, thanks for taking my question. I guess, you've adjusted lumber production in response to the weakness in prices. But with OSB pricing where it is, would you potentially reduce production as well? I'm just asking relative to your guidance of comparable volumes in the fourth quarter.

Question: Hong Zhang - JPMorgan Chase & Co - Analyst : Great. Thank you.

Question: Mike Roxland - Truist Securities - Analyst : Yeah. Thank you, Devin, Davie, Andy, for taking my questions. One -- the first one I have is, Devin, you mentioned that there are some items that you consider as an integrated producer in terms of running lumber that smaller nonintegrated producers don't have to consider. Any way to expand on what factors you're referencing?

Question: Mike Roxland - Truist Securities - Analyst : Got it. And in this one, I know we're running over here, but just one quick second question. In terms of Natural Climate Solutions, any concerns over the government cutting funding? I know you've spoken about this in past calls. But obviously, the government from get-go has been aggressive with wind. From the outset, it has become more -- it seems to have become more aggressive on solar. So any concerns about government and maybe restricting federal funding for these types of projects?

Question: Mike Roxland - Truist Securities - Analyst : Thank you very much.