Net income at Plum Creek rose 56% from the same period a year ago to reach $50 million during the third quarter, the company announced on Monday. Total revenues at the Seattle-based timber harvesting and lumber manufacturing company also increased 13% to hit $293 million.
"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," said president and CEO Rick Holley. "Our results for the quarter came in much as we anticipated."
The company's Northern resources segment posted an operating income of $7 million, a $2 million improvement from the same period last year. Prices for sawlogs from the region were 7% higher than a year ago. Plum Creek harvested 1.2 million tons during the quarter, a 100,000 ton improvement from last year's third quarter.
The Southern resources segment experienced a 16% drop in operating profit to $12 million. Prices for both sawlogs and pulpwood in the region were lower than the previous year, which the company said was due to favorable supply conditions caused by abnormally dry weather. Sawlog prices declined 15%.
The manufacturing segment reported an operating profit of $3 million, down $4 million from the same time last year. Sales, meanwhile, fell $3 million to $67 million. Lumber prices and sales volume remained flat, while profitability in the division's panel businesses fell because of lower prices and sales volume.
Medium density fiberboard prices fell 4% and sales volumes also went downwards by 2%. Plywood volumes were about 6% lower and prices fell 2% compared to third quarter 2010.
The real estate segment posted revenues of $67 million, a 71% increase, while operating income more than doubled to $46 million. Plum Creek sold 36,000 acres during the quarter. The company also completed the acquisition of 50,000 acres of timberlands in Georgia and Alabama for approximately $75 million.
"During these challenging economic times, Plum Creek is fortunate to own a diversified portfolio of hard assets that provides operational and financial flexibility and is an excellent store of value for its owners," Holley said.