Weyerhaeuser Co Earnings Call Nuggets: WRECO Consumer Behavior and Weather Impact
WRECO Consumer Behavior
Gail Glazerman – UBS: I guess you talked about in WRECO seeing strength in June, business busier than May, I’m wondering if you can give a little bit of perspective on July. With interest rates rising, have you seen any sort of changes in consumer behavior in WRECO?
Daniel S. Fulton – President and CEO: We have not seen any significant changes in behavior, Gail. The thing that was noteworthy about June was, as we look at the pattern of sales, it was noteworthy because normally we see some summer slowdown. But in fact, June being stronger than May, it was the first time that’s happened since 2005. And so to me that is evidence that we are on a path of this longer-term recovery. If you think about where housing starts are today as compared to long-term trend levels, we’ve got a long way to go. And so, we should expect to see stead improvement in it. So, we are breaking some of these seasonal patterns and that’s a good thing.
Gail Glazerman – UBS: And just one other quick question. Patty, the Wood Products guidance for the third quarter, are you assuming that the recent price improvement in OSB and lumber continues or is it kind of based on current levels of pricing?
Patricia M. Bedient – EVP and CFO: Yeah, it is that it will continue to improve for all the reasons that we talked about in terms of the underlying fundamentals, but it will still be well below what the average was for the second quarter. But as I said, we do expect that while it will be less than what we earned in the second quarter, it will still be well above the third quarter of last year. So, I think that will give you a little bit in terms of the guidance what we are looking at out of the Wood Products segment.
Mark Connelly – CLSA: Congratulations both Dan and Doyle. So, your pulp business is doing fine. What I was wondering is if you could tell us how well you think the market has absorbed the new capacity that other people have been bringing on. You haven’t seen quite the impact some others have. But I’m just curious if you think competitive pressure there is still significant. And then the second more specific question with respect to logs in the south. I’m curious how much the wet weather has actually affected your production. Obviously, we are all talking about demand, but I’m curious whether we are going to see a production impact from all the rain that we’ve had?
Daniel S. Fulton – President and CEO: With respect to the pulp market, Patty commented thinking about third quarter guidance. We are seeing relative stabilization. There has been some change in supply, some going out of the market with (indiscernible) completing their shift in their mill. Fundamentally we rely on the relationships with our longer-term customers and so we feel relatively confident about demand levels going forward. We would certainly benefit from a pickup in global growth, because there has been some softness. But at this point, I think the reliance that we have on our longer-term relationships with large global customers has served us well…
Patricia M. Bedient – EVP and CFO: I think the other thing as we think about our Cellulose Fibers business relative to other commodity fluff producers is that we do have a number of specialty products within that particular space. I think Dan referenced that (pulp) product and certainly our Crosslink product that is – commands a higher price, also probably underpins the fact that you haven’t seen as much pressure on ours as probably some of our competitors.
Daniel S. Fulton – President and CEO: Then, you had a question about logs in the South, Mark?
Mark Connelly – CLSA: Yeah. I’m just curious whether the weather that we’ve been seeing mostly in the Southeast has had much impact and is going to have much impact on you down there.
Daniel S. Fulton – President and CEO: We do not expect a significant impact in the third quarter.
Patricia M. Bedient – EVP and CFO: I think that as we look at our Timberlands business, we do expect that we will harvest more feed volume in the third quarter as I said which is typical. We did probably one place where we’ll see some additional impact is from earlier in the second quarter, we would have likely done a little more silvicultural treatment traditionally, but because of the wet weather, some of that did get deferred into the third quarter. So it’s really more from a harvest perspective that you’ll see some impact for our particular operation.
Daniel S. Fulton – President and CEO: One other element Mark is that we have generally road system that’s in better shape than perhaps some of the small orders.
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