Plum Creek Timber Earnings Cheat Sheet: FFO Falls

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

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Plum Creek Timber Company Earnings Cheat Sheet for the First Quarter

Results: The company’s funds from operations (FFO) fell 21.7% from the year-earlier quarter to 18 cents. FFO, a measure of performance of a real estate investment trust (REIT), removes the profit-reducing effect that depreciation has on earnings. It fell short of the consensus estimate of 23 cents per share.

Quoting Management: “Plum Creek performed well in the first quarter. We took advantage of attractive pulpwood markets and seamlessly integrated the harvest from our recently acquired timber deed in the Gulf South region. However, results didn’t meet our initial expectations due to timing differences in our real estate sales,” said Rick Holley, president and chief executive officer. “Our first quarter real estate sales, while higher than the first quarter of last year, were below our initial expectations. Performance in our timber and manufacturing segments was similar to the first quarter of 2011, and we remain on track to meet our financial goals for the year.”

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 32 cents a share to 28 cents over the last ninety days. At $1.17 per share, the average estimate for the fiscal year has fallen from $1.32 ninety days ago.

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

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