Weyerhaeuser's Q1 2025: Unpacking Key Contradictions in Lumber Demand, EWP Pricing, and Market Dynamics

Lumber demand and inventory levels, EWP pricing and volume outlook, forest carbon credits expectations, lumber demand and pricing, and Southern Yellow Pine and SPF market dynamics are the key contradictions discussed in Weyerhaeuser's latest 2025Q1 earnings call.



Solid Q1 Performance Despite Macroeconomic Uncertainty:
- Weyerhaeuser reported first quarter GAAP earnings of $83 million or $0.11 per diluted share on net sales of $1.8 billion.
- Adjusted EBITDA totaled $328 million, a 12% increase over the fourth quarter of 2022.
- The solid results were achieved despite elevated macro-economic uncertainties and were driven by strong domestic sales realizations in the West.

Timberlands and Western Export Market Dynamics:
- Timberlands contributed $102 million to first quarter earnings, with adjusted EBITDA at $167 million, a $41 million increase compared to the fourth quarter.
- Log demand in the West was healthy, leading to higher pricing and sales realizations, supported by improved demand for domestic customers and a shift from China due to the log import ban.

Real Estate and Energy and Natural Resources Segment:
- Real Estate and Energy and Natural Resources contributed $56 million to first quarter earnings, with adjusted EBITDA at $82 million.
- The segment's performance was driven by solid demand for real estate properties and significant premiums to timber value.

Lumber Market Performance and Outlook:
- Wood Products contributed $106 million to first quarter earnings, with adjusted EBITDA for lumber at $40 million, a $19 million improvement compared to the fourth quarter.
- The increase in lumber prices was supported by concerns around Canadian supply and building activity into the spring months, despite cautious buyer sentiment.

Innovation and Carbon Capture and Sequestration:
- Weyerhaeuser's Natural Climate Solutions business reached a significant milestone with Occidental Petroleum signing a 25-year off-take agreement for 2.3 million metric tons of CO2 per year.
- This development represents tangible progress in advancing Weyerhaeuser’s growth in the CCS space and underscores the importance of selecting sophisticated partners.