Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you talk about the demand trends in the new and R&R channels as we move through April? A: Eric Cremers, President and CEO, explained that the current market environment for lumber is decent, with the South on firmer footing than the North. Prices in the South are higher than the latest random lengths print, while the North is selling below it. The South has been on an upward trajectory since the start of the year, with solid treater activity. The North is digesting inventory bought in anticipation of tariffs that didn't happen. Home center takeaway remains good, with year-to-date volumes running 4% above the prior year. The expectation of higher duties may compel inventory building later in the year, with price risk to the upside.
Q: How would you characterize channel inventories currently? A: Eric Cremers noted that the industry operates at relatively low inventory levels due to high interest rates and carrying costs. The exception may be some northern species, where there might be an inventory hangover from tariff concerns.
Q: What impact did the announcement of tariffs on Liberation Day have on demand? A: Eric Cremers stated that the announcement didn't significantly change end consumer demand. Some advance ordering occurred in anticipation of Canadian tariffs, but the effect was not huge.
Q: What happens to Canadian lumber volumes when duties increase to 34-35%? A: Eric Cremers expects a mix of absorption and impact. Larger companies with mills in both Canada and the South may absorb some costs, while smaller operators may face closures or curtailments due to the onerous duty.
Q: How did Waldo's contribution to EBITDA in the wood product segment compare year-on-year? A: Eric Cremers mentioned that Waldo's contribution isn't where they want it to be due to pricing issues, not operational performance. The mill runs well, but wider dimensions didn't see the expected price run-up. Higher prices are expected as the year progresses.
Q: Can you provide insights into the real estate market, particularly in the South? A: Wayne Wasechek, CFO, noted strong demand for smaller transactions, with a forecast of 26,000 acres for the year. Larger transactions see healthy demand and pricing, though fewer acres are coming to market.
Q: What is the potential timeline for solar and lithium opportunities to convert to meaningful financial contributions? A: Wayne Wasechek indicated that no deals are expected to close this year, but one or two may start next year. Option periods are 3-5 years, with regulatory agency backlogs stretching the process.
Q: Are home builders showing increased interest in using more yellow pine due to potential duties on Canadian species? A: Eric Cremers confirmed that substitution has been ongoing, with more chatter about it recently. Southern yellow pine production has grown, and interest from builders is expected to continue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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