Plum Creek Timber Q3 Profit Rises - Quick Facts

(RTTNews) - Plum Creek Timber Co., Inc. (PCL) Monday reported third-quarter earnings of $72 million or $0.44 per share, up from $59 million or $0.36 per share in the same period last year.

On average, 11 analysts polled by Thomson Reuters expects the company to earn $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues improved to $366 million from $354 million last year. Analysts expected revenues of $359.38 million.

Looking ahead, the company expects to report fourth quarter earnings between $0.26 and $0.31 per share. Analysts currently expect fourth-quarter earnings of $0.33 per share.

Additionally, the company has entered into a purchase and sale agreement to acquire approximately 501,000 acres of industrial timberlands, and related assets from MeadWestvaco Corp. (MWV) for approximately $1.1 billion.

The assets include MWV's U.S. forestlands, an interest in approximately 109,000 acres of high-value rural and development-quality lands, totaling approximately 501,000 acres in Alabama, Georgia, South Carolina, Virginia and West Virginia.

The transaction is valued at approximately $934 million, of which approximately $74 million will be in cash and $860 million will be in the form of a 10-year installment note from Plum Creek. Also included in the transaction is the royalty and lease income currently being generated on these lands from coal and wind.

At closing, Plum Creek will pay the seller $226 million in cash and issue an $860 million ten-year installment note for the assets.

Upon completion of the transaction, through a 50/50 joint venture formed by Plum Creek and MeadWestvaco, the companies will pursue an entitlement and development strategy for 87,000 acres of high-value lands over the next several years in the Charleston, S.C., market.

"This transaction adds significant assets to our existing timber resource base and is expected to be cash flow accretive in the first 12 months. It also expands our portfolios of high-value rural land and non-timber resources," said Rick Holley, CEO.