It looks like another up and down year for the timber industry as first quarter results for three major producers showed little consistency. Potlatch reported a 16% increase in revenues and quintupled net earnings compared to the year earlier period. Both Plum Creek and Deltic experienced falls of more than 50% in net income during the first quarter compared to the same period a year ago, with Plum Creek falling just over 50% and Deltic plummeting 95%. Plum Creek and Deltic also saw total revenues fall.
The results may not be stellar, but the companies continue to remain upbeat about the future of logging and the timber industry.
"Increases in offshore demand are combining with anticipated reductions in North American timber supply to tighten some regional timber markets today," said Plum Creek president and CEO Rick Holley. "We expect these factors to positively impact broader log markets as the domestic economy and residential construction activity recover."
The Spokane, Wash.-based real estate investment trust reported net earnings of $7.7 million for the quarter, a vast improvement over the $1.2 million in net earnings the company reported a year ago. The increase was bolstered by $17.1 million in earning from continuing operations before interest and taxes as well as no net of tax on discontinued operations, of which the company paid $189,000 during first quarter of last year.
The company's wood products segment increased revenue by $700,000 during the quarter to finish at $68.5 million. The segment saw operating profit decrease by over 40% to finish at $2.9 million. The resource segment increased revenue by 15.2%, compared to first quarter 2010, to finish at $51.6 million. Potlatch's real estate segment also saw revenues almost triple to $13 million.
Potlatch attributed the performance of the wood product segment to a 9% rise in lumber prices between the last quarter of 2010 and this first quarter of 2011, as well as a 1% decrease in lumber shipments during the same period.
Potlatch oversees forests in Idaho, Minnesota, and Arkansas.
The Seattle-based company announced net income fell by over 50% compared to first quarter 2010, and finished at $38 million. The timber giant saw operating income fall almost 37%, compared to a year ago, to $60 million. Revenues also fell in almost all segments as the company reported total revenues of $275 million for the quarter.
The timber segment reported revenues of $141 million, down $10 million from a year ago. The real estate segment took the biggest hit and slipped 37% in revenue with $62 million. The manufacturing segment reported a $7 million increase in revenue to finish at $67 million.
According to its earnings report, the company expects to harvest between 15 and 16 million tons of timber this year.
Plum Creek oversees approximately 6.8 million acres of timberlands throughout the country.
The El Dorado, Ark.-based timber company announced a 95% fall in net income, to $92,000, between first quarter 2011 and first quarter 2010, even though not sales only fell 7.8% to $29.4 during that same period. The fall in numbers was attributed to a lower average lumber sales realization as well as a sawmill log supply shortage due to poor whether in the Southeast part of the country, where Deltic operates.
The woodlands segment reports an operating income of $4.7 million during the quarter, a $400,000 decrease compared to the year earlier period. The company harvested 146,089 tons of pine sawtimber during the first quarter.
The company's mills segment posted an operating income of $700,000 for the quarter, a 72% fall from the $2.5 million operating income the segment had during the first quarter of 2010. The operating income decrease was attributed to a lower average lumber sales price. Lumber sales volume also decreased during the quarter, further impacting the company.
The company oversees timberlands in Louisiana and Arkansas.