PotlatchDeltic lumber profits plummet 66 percent, still beats expectations
November 7, 2019 | 6:22 pm UTC
SPOKANE, Wa. - Lumber giant PotlatchDeltic Corp. has seen a further sales decrease - this time 66 percent for the third quarter. Wall Street analyists predicted it would have lost more, however.
For the period ended Sept. 30, PotlatchDeltic - which formed after a merger early last year - reported net income of $20.6 million, or 30 cents per share, down 66 percent compared to $60.4 million, or 93 cents per share, in the same period a year ago. Revenue for the three-month period fell nearly 21.7 percent to $226.3 million compared to $289.2 million in the same quarter of 2018.
The company said volatile lumber prices were to blame.
"Wood Products established new quarterly lumber production and shipping records and remains on pace to complete $40 million of capital projects to expand capacity and increase grade recovery,” said CEO Mike Covey. “While Timberlands scaled back Southern harvest volumes in the third quarter due to full mill inventories, the segment benefited from higher than expected Southern sawlog prices. Looking forward, we remain optimistic that the lumber market will improve.”
Of the company's three divisions - real estate, timberlands, and wood products - wood products suffered the heaviest decline of 87.3 percent from 2018.
Potlatch and Deltic Timber Corp. merged early last year, forming a wood products and forestry behemoth. PotlatchDeltic employs more than 1,500 and serves more than 200 customers. Its lumber capacity is heavily weighted towards high-margin southern yellow pine lumber, with over half of the company’s capacity being produced at its three southern mills. The company manages nearly 2 million acres of land and operates six sawmills and an industrial-grade plywood mill.
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