Plum Creek Timber Co. Inc. Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Plum Creek Timber Co. Inc. (NYSE:PCL) will unveil its latest earnings on Monday, October 29, 2012. Plum Creek Timber is a real estate investment trust which owns and manages timberlands and produces lumber products, plywood, medium density fiberboard, and related by-products.

Plum Creek Timber Co. Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 36 cents per share, a rise of 16.1% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 35 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 36 cents during the last month. For the year, analysts are projecting profit of $1.13 per share, a decline of 5% from last year.

Past Earnings Performance: Last quarter, the company topped expectations by 4 cents, coming in at net income of 22 cents per share versus a mean estimate of profit of 18 cents per share. This followed two straight quarters of missing estimates.

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Wall St. Revenue Expectations: Analysts predict a rise of 18.4% in revenue from the year-earlier quarter to $347 million.

A Look Back: In the second quarter, profit fell 18.2% to $36 million (22 cents a share) from $44 million (27 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 3.5% to $294 million from $284 million.

Stock Price Performance: Between July 30, 2012 and October 23, 2012, the stock price rose $3.31 (8.1%), from $40.63 to $43.94. The stock price saw one of its best stretches over the last year between January 4, 2012 and January 19, 2012, when shares rose for 11 straight days, increasing 8.8% (+$3.22) over that span. It saw one of its worst periods between May 7, 2012 and May 18, 2012 when shares fell for 10 straight days, dropping 7.1% (-$2.78) over that span.

Key Stats:

The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 23.7% in the first quarter and then again in the second quarter.

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 22.5% in the first quarter before climbing again in the second quarter.

Analyst Ratings: There are mostly holds on the stock with six of nine analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.59 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company improved this liquidity measure from 0.58 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 3.5% to $439 million while liabilities rose by 2.3% to $745 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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