Plum Creek Timber Co. reported today that its combined timber segments' operating profit climbed to $30 million in the third quarter from $24 million in the year-earlier period, while its manufacturing segment swung to a $7 million operating profit from a $1 million loss during 2009's third quarter.
Company-wide earnings in the third quarter for Seattle-based Plum Creek climbed to $32 million from $19 million even though revenues dropped 11.9% to $259 million.
Timber markets are expected to be fairly stable during the fourth quarter, the company said, with sawlog prices remaining at third-quarter levels and comparing favorably to the fourth quarter of 2009. Meanwhile, the manufacturing segment is forecast "to remain profitable at slightly above break-even performance during the seasonally weak fourth quarter."
By group, the Northern Resources segment posted a $5 million operating profit, up from the $3 million profit in 2009's third quarter. Average sawlog prices were 18% higher than a year earlier. The Southern Resources segment posted a $25 milloin operating profit, up from $21 million. The manufacturing segment's $7 million operating profit might have looked particularly good against 2009's $1 million loss, but company officials noted that last year's report included the effect of a $4 million pension settlement charge.
Profitability in each product line did improve, the company said, and lumber prices rose 9% on average, plywood was up 7% and medium-density fiberboard (MDF) fetched 6% more. Sales volumes for plywood and MDF grew 7% and 14%, respectively, while lumber sales volumes fell 28% because of the permanent closure of two mills last year.
