Potlatch Corp.'s wood products segment recovered from a $3 million operating loss in last year's second quarter to post income of $6 million in April through June of this year, its best showing since winter 2006, the company announced today. Potlatch also revealed it has agreed to sell 41,500 acres of Wisconsin and Arkansas timberland and has an option to sell another 46,500 acres in the fourth quarter--deals that involve 5.5% of Potlatch's 1.6 million acres of holdings.
Looking ahead, president and chief executive officer Michael Covey said he did not expect the increases in price and demand seen in the first half of the year would continue in the third quarter, but he doesn't think prices and demand will drop to last year's levels, either.
Lumber shipment volumes rose 9% in the second quarter from the year-earlier period, and the sales prices for that wood were 34% higher reaching $77.2 million, the Spokane, Wash.-based company said.
Company-wide, Potlatch's net earnings jumped to $11.7 million from $3.8 million a year ago as revenues soared by 63.7% to reach $129 million.
"All of our business segments reported solid quarterly results, as strong business conditions continued through the second quarter," Covey said in a statement. "The price increases and demand that benefited our wood products segment in the first quarter carried into our resource segment's business, validating our decision to defer harvest levels last year. Across all products and regions, our resource business realized 20% higher selling prices over the first quarter of 2010, and 29% higher selling prices vs. the second quarter of last year.
"Our wood products segment delivered quarterly operating income for the second consecutive quarter, as both lumber sales prices and shipment volumes increased again in the second quarter," Covey added. "Lumber sales prices increased 11% and 34% as compared to the first quarter of 2010 and the second quarter of 2009, respectively. Our real estate segment contributed its highest quarterly operating income since the first quarter of 2009."
Out in the woods, the resource segment's operating income jumped to $15 million in the second quarter from $4.5 million in April through June 2009. Sawlog sales volumes in the northern region increased 148% and prices climbed 22%, while southern region sawlog sales volumes rose 16% and prices went up 13% from a year before.
The timberland sales announced today involve 29,600 acres in Wisconsin and 11,900 acres in Arkansas. They are being purchased by RMK Timberland Group for $29 million; the sale is expected to close by August. Potlatch also has signed an option agreement to sell another 29,100 acress in Wisconsin--most of its remaining acreage in the state--and another 17,400 acres in Arkansas during the fourth quarter for $35 million.