Operating income rose at Plum Creek Timber Co.'s timber and manufacturing segments in the second quarter from the year-earlier period, but reduced revenues and income in the real estate section caused net profit to slid 18.2% to $36 million, the company reported today.
Total revenues increased 3.5% to $294 million, but operating income shrank 12.7% to $55 million. The results by segment:
- Southern Resources: Operating income up 46.7% to $22 million on a 25% rise in revenue to $105 million.
- Northern Resources: Operating income up 33% to $4 million on a 27.2% revenue gain to $56 million.
- Manufacturing: An 80% climb in operating income to $9 million on a 13.5% gain in revenue to $85 million.
- Real Estate: Operating income 42% lower to $29 million on a 40.5% revenue decline to $47 million.
Seattle-based Plum Creek attributed the real estate segment's changes to the fact that revenue in 2011's second quarter was driven by $62 million worth of conservation easement transactions, while there was only a $10 million easement deal in this year's second quarter. Plum Creek also sold $37 million worth of land in the April-June period.
On the timber side, the sawlog harvest in the Northern Resources segment grew by 34% to about 160,000 tons while the Southern Resources segment experienced at 36% growth in its sawlog harvest to 406,000 tons. Prices in the north--roughly $71 per ton--matched 2011's second-quarter levels, the company said. They were about $1 per ton higher in the south.Manufacturing segment revenues strengthened thanks to a 2% increase in lumber sales volume compounded by a 4% increase in price. Plywood prices rose 7% and enjoyed a 15% gain in sales volume, while medium-density fiberboard prices grew by 2% and sales volume increased 22%, Plum Creek said.
The company said it "expects a slow pace of recovery to continue through the remainder of the year." It predicted manufacturing results would decline slightly in third quarter.
"Our operations are performing well and we look forward to continued growth in the second half of the year, but believe a stronger recovery in the nation’s economy is more likely in 2013," president and CEO Rick Holley said in a statement.