Plum Creek Timber Earnings: EXCEEDS Expectations

Rising costs hurt S&P 500 (NYSE:SPY) component Plum Creek Timber Company Inc. (NYSE:PCL) in the second quarter as profit dropped from a year earlier. 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 Inc. Earnings Cheat Sheet

Results: Net income for Plum Creek Timber Company Inc. fell to $36 million (22 cents per share) vs. $44 million (27 cents per share) a year earlier. This is a decline of 18.2% from the year-earlier quarter.

Revenue: Rose 3.5% to $294 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Plum Creek Timber Company Inc. beat the mean analyst estimate of 18 cents per share. It beat the average revenue estimate of $273.3 million.

Quoting Management: “Earnings in our timber and manufacturing businesses improved over the past year,” said Rick Holley, Plum Creek’s president and chief executive officer. “Improving demand for our lumber and panels drove a $4 million improvement in our Manufacturing segment’s second quarter profit compared to 2011. In our resources segments, higher harvest volumes, supplemented by volume from our recent timber deed acquisition, helped drive $8 million of profit growth and a $15 million increase in adjusted EBITDA. In our Real Estate segment, last year’s second quarter sales were anchored by a couple of large conservation transactions making for a challenging comparison. However, our Real Estate segment revenues for this second quarter of $47 million were a bit higher than we initially anticipated. We continue to be on track to grow our adjusted EBITDA by approximately $50 million this year.”

Key Stats:

The company’s net income has fallen in each of the last two quarters. In the first quarter, net income fell 23.7% from the year-earlier quarter.

After two quarters of falling short, the company beat estimates last quarter. In the first quarter, it missed the mark by 5 cents, and in the fourth quarter of the last fiscal year, it came in under estimates by one cent.

The company’s revenue has now risen for two quarters in a row. In the first quarter, revenue increased 22.5% to $337 million from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from 32 cents a share to 35 cents over the last ninety days. At $1.10 per share, the average estimate for the fiscal year has fallen from $1.17 ninety days ago.

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

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