Plum Creek Timber Company Inc. PCL reported fourth-quarter 2015 earnings per share of 19 cents, which included transaction costs of 4 cents per share related to the pending merger with Weyerhaeuser Company WY. Excluding the transaction costs, adjusted earnings per share for the company came in at 23 cents, which beat the Zacks Consensus Estimate of 16 cents. Adjusted earnings per share for the prior-year quarter were 38 cents.
Plum Creek Timber Company Inc. (PCL) EPS BNRI - Last 5 Quarters | FindTheCompany
Total revenue for the quarter was $323 million, down 24.5% year over year. However, the figure surpassed the Zacks Consensus Estimate of $311 million.
For full-year 2015, earnings per share were $1.12, including merger-related expenses of 4 cents per share. For full-year 2014, earnings per share were recorded at $1.21, which included after-tax gains of 2 cents per share related to MDF fire. Total revenues for 2015 came in at $1.45 billion, down from $1.47 billion in 2014.
Merger with Weyerhaeuser
In Nov 2015, Plum Creek and Weyerhaeuser had inked a deal to create a leading global timber, land and forest products company. The merger deal awaits approvals from shareholders of both Plum Creek and Weyerhaeuser. The voting of the shareholders is scheduled on Feb 12, 2016.
Segmental Performance
During the quarter, operating income at the company’s Northern Resources segment declined to $5 million from $10 million recorded in the year-ago quarter, mainly due to lower harvest volumes and lower sawlog prices.
The Southern Resources segment posted operating income of $27 million, down from $38 million in the prior-year quarter. The Southern harvest volumes declined 12%, while the average Southern sawlog prices fell around $1.50 per ton, both on a year-over-year basis.
Operating income at the Real Estate segment was $30 million for fourth-quarter 2015, lower than $42 million reported a year ago. Results reflected the sale of 16,950 acres of HBU/Recreation lands for over $1,900 per acre; 12,420 acres of small, non-strategic timberlands for $1,390 per acre and 4,600 acres of conservation lands, for $800 per acre.
Operating income at the Manufacturing segment came in at $4 million, down from $14 million in the year-ago period. Notably, fourth-quarter 2014 results include $4 million of pre-tax gains from insurance recoveries associated with MDF fire.
Operating income for the Energy and Natural Resource segment was $10 million, up from $7 million in the prior-year quarter.
Liquidity
Plum Creek ended fourth-quarter 2015 with $88 million in cash and cash equivalents, up from $81 million at the end of the prior quarter. Total long-term debt was nearly $1.98 billion, flat on a sequential basis.
Our Viewpoint
Post merger, the combined entity will own over 13 million acres of productive timberland, which will help it reap economies of scale and capitalize on housing recovery.
Both Plum Creek and Weyerhaeuser currently has a Zacks Rank #3 (Hold).
Presently, we look forward to other REIT stocks that are scheduled to release fourth-quarter 2015 results next week. These include Liberty Property Trust LPT and Highwoods Properties Inc. HIW.
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