Plum Creek Timber Co. posted first-quarter earnings of $29 million, down 23.6% from $38 million in the first quarter of 2011. Revenues in the first quarter totaled $337 million, up 22.5% from $275 million in the year-ago period
Earnings declined due to lower reported income from the real estate segment, although revenues and cash generated by the segment increased.
“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 CEO.
“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.”
The Northern Resources segment reported operating profit of $6 million during the first quarter, compared with $7 million in the first quarter of 2011.
Operating profit in the Southern Resources segment was $21 million, up $2 million from the first quarter of 2011 due to higher harvest volumes.
The Real Estate segment reported revenue of $100 million, and operating income of $30 million. First-quarter 2011 revenue totaled $62 million, and operating income was $38 million. Although revenue increased, higher non-cash land basis expense (the book value of the lands sold) resulted in lower operating profit.
The Manufacturing segment reported operating income of $4 million, unchanged from the first quarter of 2011.
The company completed the purchase of about 4.7 million tons of mature southern yellow pine timber in a negotiated timber deed transaction valued at $103 million. The timber is located in the Gulf South region. “The acquisition is expected to be earnings neutral in the first year and become increasingly earnings and cash accretive over the eight-year life of the investment,” according to a company release.