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Weyerhaeuser (WY) Sells Liquid Packaging Facility to Nippon

Zacks Equity Research
Updated

Forest product manufacturer and supplier Weyerhaeuser Company WY announced that it has completed divesting its liquid packaging board business to Nippon Paper Industries Co., Ltd. The assets sold were part of the company’s previous business segment, Cellulose Fibers, now treated as a discontinued item.

As revealed, the sold-off assets included Weyerhaeuser’s Longview, WA-based mill, which has an annual capacity of 280,000 tons. The company intends to use the divestment-proceeds of approximately $285 million in cash or $225 million after-tax for repaying debts.

The disposition is part of Weyerhaeuser’s strategic decision to help it concentrate on its core timber, land, and forest products business. In addition, in May, the company agreed to sell its Cellulose Fibers pulp mills for approximately $2.2 billion cash to International Paper Company IP. However, the company is still working on finding a suitable alternative for its publishing papers joint venture facility. Also, the company is in the process of permanently shutting down its lumber and plywood mill in Columbia Falls, MT.

We believe such strategic decisions will enable Weyerhaeuser to boost its profitability in the quarters ahead. Currently, the Zacks Consensus Estimate for the stock is pegged at 81 cents per share for 2016 and $1.18 per share for 2017.

WEYERHAEUSER CO Price and Consensus

 

WEYERHAEUSER CO Price and Consensus | WEYERHAEUSER CO Quote

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Zacks Rank & Other Stocks to Consider

Weyerhaeuser, with a market capitalization of $23.9 billion, currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the building products industry include Potlatch Corporation PCH and Universal Forest Products Inc. UFPI, both sporting a Zacks Rank #1 (Strong Buy).

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UNIVL FST PRODS (UFPI): Free Stock Analysis Report
 
WEYERHAEUSER CO (WY): Free Stock Analysis Report
 
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INTL PAPER (IP): Free Stock Analysis Report
 
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Zacks Investment Research