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Why Weyerhaeuser Company (WY) Earnings Could Soar Higher

Weyerhaeuser hasn’t hesitated, though, to make some smart strategic moves. Last month, the company agreed to pay $2.65 billion to buy the Longview Timber business from Brookfield Asset Management Inc. (USA) (NYSE:BAM) and Brookfield Infrastructure Partners L.P. (NYSE:BIP). By selling, Brookfield will be able to reinvest proceeds into areas that are more consistent with its current focus. Meanwhile, Weyerhaeuser picks up timberland in the Pacific Northwest that has easy access to Asian export markets, letting it take further advantage of tight supply conditions caused by the mountain pine beetle’s huge presence further north in British Columbia.

In addition, Weyerhaeuser is managing long-term risk. With its innovative climate-change research, the company hopes to get information to help it manage and protect water resources while tailoring tree planting to handle potentially drier growing seasons.

In the Weyerhaeuser earnings report, watch to see what role incoming CEO Doyle Simons plays in the call. With Simons coming from the paper industry, it’ll be interesting to see whether he drives the company more toward paper products. With so much potential demand from building materials, though, it’s hard to see Weyerhaeuser Company (NYSE:WY) making major changes from its successful strategy thus far.

The article Why Weyerhaeuser Earnings Could Soar Higher originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool owns shares of Brookfield Infrastructure Partners.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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