|Seattle, Washington, USA, 04 October 2007 --(BUSINESS WIRE)-- Plum Creek Timber Company, Inc. (NYSE:PCL) today reported the company will record a USD 4 million non-cash fire loss during the third quarter.
An active fire season in western Montana damaged approximately 41,000 acres, or 0.5%, of the company's timberlands. The extreme fire risk in western Montana this season led the company to halt timber operations in the region during August. As a result, sawlog harvest levels were nearly 150,000 tons lower than expected in the company's Northern Resource segment. Salvage operations have begun and the company expects a portion of the standing timber on the land will be salvaged in the coming months.
The company also reported that several land sales originally scheduled to close in the third quarter are now scheduled to close in the fourth quarter. As a result of this timing difference, the company expects to report Real Estate segment sales of approximately USD 94 million during the third quarter. The company originally expected these third-quarter sales to be between USD 110 and USD 120 million. The company expects to report strong Real Estate segment revenues for 2007, on the low end of its estimated range of USD 330 and USD 350 million.
"We manage Plum Creek for sustainable, long-term value creation. We continue to focus on this objective, as we always have, when determining our day-to-day harvest plans," said Rick Holley, president and CEO. "Sawlog markets continue to bounce along the bottom, and have been particularly soft in certain markets in the southeastern United States over the past year. With the prospect of continuing weak lumber demand in the fourth quarter, we plan to further reduce our sawlog harvest by approximately 200,000 tons in these southern markets. We believe this harvest deferral will allow us to capture better pricing for these trees when markets improve. In the meantime, these trees continue to grow, increasing the value of the company," Holley said.
"As a result of our fire loss, the associated reduction in third-quarter harvest, and our plans for future harvests, we currently expect our full-year earnings to be between USD 1.33 and USD 1.38 per share," Holley continued. "While our plans reduce near-term earnings from our timber segments, we believe they enhance the long-term value of the company."
The company expects to report third quarter earnings between USD 0.32 and USD 0.37 per share including the USD 0.02 per share fire loss expense after the market closes on 22 October.
Plum Creek is the largest and most geographically diverse private landowner in the nation with 8.2 million acres of timberlands in major timber producing regions of the United States and 10 wood products manufacturing facilities in the Northwest.
Source: Plum Creek Timber Company, Inc.