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  • Healthy Profits at major US Forestry Investment company

    2009 - 10.28

    Plum Creek Timber Company has announced third quarter profits of 19 million dollars on revenues of 294 million dollars. Its Chief Executive Officer Rick Holley sounded quite bullish about the future prospects of the forestry industry given the problems in the construction markets in the USA. Plum Creek is the largest and most geographically diverse private landowner in the United States with approximately 7 million acres of timberlands in major timber producing regions of the United States and forestry products manufacturing facilities.

    For the financially minded forestry investors, first nine months performance of 2009 were $208 million on revenues of $1.04 billion. Results for the first nine months of 2009 include approximately $13 million of after-taximpairment, severance and pension settlement charges mainly associated with the downsizing of the company’s manufacturing operations. These items were offset by unrelated one-time tax benefits of approximately $8 million recorded in the 1Q 2009. Combined, the downsizing items and unrelated tax benefits reduced net income by $5 million, or approximately $0.03 per diluted share.

    In comparison to 2008, earnings for the first nine months of 2008 were $138 million on revenues of $1.15 billion. Results for the first nine months of 2008 include the effect of a $6 million after-tax impairment charge related to the company’s lumber manufacturing business that reduced net income by approximately $0.04 per diluted share.

    Cash provided by operating activities during the first nine months of 2009 totaled $492 million. The company ended the 3Q with $351 million in cash and cash equivalents.

    “Our 3Q results reflect some quarter-over-quarter pricing improvement in Pacific Northwest timber markets and stable prices in Southern markets,” said the CEO. “The quarter’s results also reflect some benefit from our manufacturing downsizing, and our cost management efforts Timber markets appear to have stabilized in most cases, and we have experienced some modest log price improvement in some regions. The company remains well positioned with a strong balance sheet and excellent liquidity.”

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here

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