Hear that sound? [Cue the crickets.] That's what you hear when this company's operations take an abrupt nosedive as the market for their products gets whittled away to unprofitable levels.
A simple glance at Weyerhaeuser's
Pre-tax earnings contracted across every operating segment, with the wood products and real estate divisions posting enormous losses. Lower sales volumes led the wood products segment to a $146 million loss. Heading into the typically slower fourth quarter, the company expressed no optimism for the near-term outlook, and expects even greater losses for the fourth quarter.
As for real estate, asset impairments of $235 million drove the segment to a $316 million loss for the third quarter. That news alone would be reason enough to steer clear of this company for a while, but management expects home prices to fall still further and anticipates more substantial losses in the fourth quarter.
There are only so many negative words in the English language, and I think most have already been used to describe the state of the housing market. Weyerhaeuser's outlook is weyery bad, but smaller competitor Louisiana-Pacific
The moral of the story is: Run as far away from the homebuilding and related materials sectors as fast as your Foolish feet will take you. Not even a move to REIT status as Rayonier