REVENUEMiss -2.9%
EPSBeat +128.6%
Actuals vs. estimates
| Metric | Actual | Consensus | Surprise |
|---|---|---|---|
| RevenueNet sales | $1.86B | $1.92B | ▼ Miss -2.9% |
| EPS(non-GAAP diluted (before special items)) | $0.08 | $0.04 | ▲ Beat +128.6% |
Highlights & what matters
- Net sales of $1,862 million missed the $1,918.365 million API Ninjas estimate, while net earnings per diluted share before special items of $0.08 beat the $0.035 estimate; with no special items, GAAP diluted EPS was also $0.08.
- Q4 2026 outlook: Timberlands comparable to Q3; Strategic Land Solutions earnings about $35 million and Adjusted EBITDA about $45 million lower than Q3; Wood Products moderately lower excluding lumber and OSB price changes. Strategic Land Solutions full-year Adjusted EBITDA is held at approximately $450 million, $25 million above the initial outlook.
- Adjusted EBITDA of $248 million rose 14 percent from $217 million a year ago but fell from $310 million in Q2; Wood Products Adjusted EBITDA of $91 million compares with $8 million a year ago and $129 million in Q2.
- Portfolio moves continue: an agreement to sell about 81,000 acres of non-core Arkansas timberlands for $146 million, closing expected in Q4, and approximately 340,000 forest carbon credits monetized year-to-date.
- The one thing that matters: The EPS beat rests on a Wood Products recovery from a near-zero base a year ago, not on momentum. A $36 million tax benefit carries much of the $61 million bottom line, and every segment is guided flat or lower into Q4.
Key metrics
| Metric | Reported | Prior year | Change |
|---|---|---|---|
| Net sales | $1.9 billion | $1.7 billion | — |
| Net earnings per diluted share | $0.08 | $0.11 | — |
| Adjusted EBITDA | $248 million | $217 million | 14 percent increase |
| Net cash from operations | $ 193 | $ 210 | — |
| Adjusted FAD | $ 110 | $ 117 | — |
| Arkansas non-core timberlands divestiture | $146 million | — | — |
Guidance changes
| Item | New guidance | Prior guidance |
|---|---|---|
| Timberlands Q4 2026 earnings before special items and Adjusted EBITDA | comparable to the third quarter | — |
| Strategic Land Solutions Q4 2026 earnings before special items | approximately $35 million lower than the third quarter | — |
| Strategic Land Solutions Q4 2026 Adjusted EBITDA | approximately $45 million lower than the third quarter | — |
| Strategic Land Solutions full year 2026 Adjusted EBITDA | approximately $450 million, a $25 million increase from the initial outlook | — |
| Wood Products Q4 2026 earnings before special items and Adjusted EBITDA | moderately lower than the third quarter, excluding the effect of changes in average sales realizations for lumber and oriented strand board | — |
Quality of earnings
- A tax benefit carries much of the bottom line. The Q3 reconciliation shows net earnings of $61 million after a $36 million income tax benefit and $63 million of interest expense; that benefit sits below operations.
- Year-over-year growth is clean of one-offs. Q3 2026 had no special items, while Q3 2025 net earnings of $80 million included a $21 million lumber mill gain and a $19 million insurance recovery; before special items net earnings rose to $61 million from $40 million.
- Cash conversion softened. Net cash from operations was $193 million versus $210 million a year ago, and Adjusted FAD was $110 million versus $117 million after $137 million of capital expenditures.
Gotchas & watch items
- Real estate fades into year-end: Strategic Land Solutions Adjusted EBITDA fell to $86 million from $129 million in Q2 and is guided about $45 million lower again in Q4, with $408 million earned year-to-date against the approximately $450 million full-year target.
- Timberlands improved sequentially: Adjusted EBITDA of $133 million versus $123 million in Q2 on significantly higher South harvest volumes, though below $148 million a year ago.
- OSB is under pressure: realizations were 2 percent lower than Q2, with unit manufacturing costs moderately higher.
- Adjusted FAD excludes real spending: it leaves out $54 million of Monticello engineered wood products capex in Q3 and $147 million year-to-date, against $388 million of total year-to-date capital expenditures.