Plum Creek Timber Company Inc. Earnings Cheat Sheet: Margin Expansion Driven by Revenue Growth, Profit Rises

S&P 500 (NYSE:SPY) component Plum Creek Timber Company Inc. (NYSE:PCL) reported its results for the third quarter. 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.

Investing Insights: Amazon.com has a Stock Chart Technical Analysts Dream About.

Plum Creek Timber Company Earnings Cheat Sheet for the Third Quarter

Results: Net income for Plum Creek Timber Company Inc. rose to $50 million (31 cents per share) vs. $32 million (20 cents per share) in the same quarter a year earlier. This marks a rise of 56.3% from the year earlier quarter.

Revenue: Rose 13.1% to $293 million from the year earlier quarter.

Actual vs. Wall St. Expectations: PCL beat the mean analyst estimate of 30 cents per share. Analysts were expecting revenue of $298.8 million.

Quoting Management: “Business conditions were largely unchanged during the past quarter, with relatively attractive pulpwood markets in most regions, healthy sawlog markets in the Northwest and Northeast and continued weak sawlog markets in the South. Our results for the quarter came in much as we anticipated,” said Rick Holley, president and chief executive officer.

Key Stats:

The company beat estimates last quarter after falling short in the previous two quarters. In the second quarter, it missed the mark by one cent, and in the first quarter, it fell short by one cent.

Net income has increased 41% year over year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed more than twofold from the year earlier quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 10.1% to $284 million from the year earlier quarter.

Gross margins grew 4.3 percentage points to 31.7%. The growth seemed to be driven by increased revenue, as the figure rose 13.1% from the year earlier quarter while costs rose 6.4%.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 41 cents per share to 38 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $1.19 per share, the average estimate for the fiscal year has fallen from $1.33 ninety days ago.

Competitors to Watch: Potlatch Corporation (NYSE:PCH), Rayonier Inc. (NYSE:RYN), Weyerhaeuser Company (NYSE:WY), Deltic Timber Corporation (NYSE:DEL), Universal Forest Products, Inc. (NASDAQ:UFPI), Louisiana-Pacific Corp. (NYSE:LPX), Pittsburgh & West Virginia Railroad (AMEX:PW), West Fraser Timber Co. Ltd. (NYSE:WFT), and Masisa S.A. (MYSZY).

Investing Insights: Amazon.com has a Stock Chart Technical Analysts Dream About.

(Source: Xignite Financials)

 

More from The Cheat Sheet