Plum Creek Timber Company, Inc. Earnings Cheat Sheet: Margins Expand and Profit Climbs

S&P 500 (NYSE:SPY) component Plum Creek Timber Company, Inc. (NYSE:PCL) reported its results for the second quarter. Plum Creek Timber Co. Inc. is a real estate investment trust, which owns and manages timberlands and produces lumber products, plywood, medium density fiberboard and related by-products.

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Plum Creek Timber Company Earnings Cheat Sheet for the Second Quarter

Results: Net income for the real estate investment trust rose to $44 million (27 cents per share) vs. $35 million (21 cents per share) in the same quarter a year earlier. This marks a rise of 25.7% from the year earlier quarter.

Revenue: Rose 10.1% to $284 million from the year earlier quarter.

Actual vs. Wall St. Expectations: PCL fell short of the mean analyst estimate of 29 cents per share. It beat the average revenue estimate of $277.6 million.

Quoting Management: “Good results from our Real Estate segment offset weaker than anticipated results from our timber operations,” said Rick Holley, Plum Creek’s president and chief executive officer. “Sawlog markets in the West and Northeast remained attractive during the second quarter however, sawlog markets in the South continued to be challenging due to extremely dry weather and weak domestic demand.”

Key Stats:

The company has now fallen short of estimates in the last two quarters. In the first quarter, it missed expectations by one cent with net income of 23 cents versus a mean estimate of net income of 24 cents per share.

Margins rose in the first quarter after falling the quarter before. Gross margin rose 2.7 percentage points to 31% from the quarter earlier quarter. In the fourth quarter of the last fiscal year, the figure rose 6.6 percentage points to 30.9% from the year earlier quarter.

Net income has increased 31.6% 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.

Over the last five quarters, revenue has increased 3.6% on average year over year. The biggest increase came in the fourth quarter of the last fiscal year, when revenue rose 38% from the year earlier quarter.

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).

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(Source: Xignite Financials)