Plum Creek Profit Plunges, But Tops Street - Update

(RTTNews) - Plum Creek Timber Co. Inc. (PCL) Monday reported a sharp decline in fourth-quarter profit, hurt by lower real estate revenue and acquisition expenses. Nevertheless, results for the quarter came in ahead of Wall Street estimates.

Going forward, the company detailed some weak earnings outlook for the first quarter and the full year 2014.

Plum Creek shares initially gained 3 percent in after-hours trade, but pulled back a little to trade at $43.61.

The Seattle, Washington-based company posted quarterly net income of $40 million or $0.24 per share, compared with $79 million or $0.49 per share last year.

Results for the recent quarter included $12 million of expenses related to the completion of its December acquisition of timberland, real estate, and subsurface resources from MeadWestvaco Corp. (MWV).

Excluding items, adjusted earnings for the quarter were $52 million or $0.31 per share.

On average, 12 analysts polled by Thomson Reuters expected earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the first quarter declined to $331 million from $354 million a year ago, but still topped analysts' expectations of $326.24 million.

Operating expenses for the quarter increased to $267 million from $257 million last year.

For the first quarter, Plum Creek expect earnings in the range of $0.12 to $0.17 per share, while analysts currently expect $0.36 per share. The company attributed the weak guidance to the timing of real estate sales.

For fiscal year 2014, the company expect earnings in the range of $1.30 per share to $1.50 per share, while analysts currently estimate $1.58 per share.

In December, Plum Creek completed the acquisition of MeadWestvaco's U.S. forestlands and also invested in a newly formed partnership comprising MeadWestvaco's development properties in the Charleston, South Carolina, region. The total consideration for the deal was about $1.1 billion.

The acquisition from MeadWestvaco added 501,000 acres of productive timberlands to Plum Creek's Southeast portfolio. As a result, the company expects 2014 harvest volume of between 20 million tons and 21 million tons.

Plum Creek stock closed Monday at $43.61, up $0.73 or 1.70%, on a volume of 1.6 million shares on the NYSE.