Second quarter operating income at Potlatch’s wood products segment quadrupled from the same period a year ago to $11.7 million behind stronger than anticipated demand, higher prices and increased production levels, the company announced today. The segment’s revenues for the period ended June 30 were $83.6 million, up 26% from last year’s second quarter.
Overall, the Spokane, Wash.-based Real Estate Investment Trust saw operating income grow 6% to $100.5 million as sales increased 5% to $117.5 million. Net income for the quarter fell by just over $3 million to $5.1 million.
"We are pleased with our second quarter results, particularly as our wood products segment greatly exceeded expectations during the quarter," said Michael Covey, chairman, president and CEO of Potlatch.
Earnings before interest, taxes, depreciation, depletion and amortization (EBITDDA) was $22.6 million, down almost $7 million from the same period last year. The company defines EBITDDA as net income adjusted for net cash interest expense, provision for income taxes, depreciation, depletion and amortization, the basis of real estate sold and non-cash eliminations.
Despite the optimism, Potlatch’s other units revealed declines in both operating income and revenue. The company’s resource unit saw operating income decrease by $900,000 to $6.7 million as sales dipped by $400,000 to $33.9 million. Seasonal factors at Potlatch’s Idaho operations and a planned harvest deferral in 2012 were cited as reasons for the unit’s declines.
The real estate division also revealed a slide in numbers as operating income fell $4.3 million to $6.7 million and revenues were cut by more than half to finish at $8.7 million. Last year’s second quarter numbers were bolstered by two non-strategic real estate sales in Idaho which produced revenues of $14.3 million.
"Results for the first half of the year exceeded our expectations and we feel confident about continued strong operating results from all of our business segments moving into the second half of 2012," said Covey. "Although there have been, and will continue to be, some slowdowns and setbacks along the way, there are many indications that the domestic housing market has bottomed and is finally beginning to slowly turn upward toward solid and continued recovery."