Plum Creek Timber ( PCL) posted a slight drop in second-quarter earnings, but met analysts' estimates and guided above current earnings expectations for the third quarter.The Seattle-based timber producer said after the bell Monday that net income fell to $57 million, or 31 cents a share, from $58 million, or 31 cents a share, a year earlier. Revenue rose to $341 million from $318 million, as results were driven by its manufacturing and Northern resources segments. "Second quarter results came in as expected," said Rick Holley, Plum Creek's president and chief executive. "Timber markets in most regions continued to strengthen modestly as our customers benefited from strong demand for lumber and plywood. Our manufacturing segment posted its best results since 1999. For the quarter, Southern harvest levels were below our expectations as torrential rains in June virtually halted harvesting operations in western portions of the South. This has left many mills in the region with critically low log inventories which should result in higher prices in the region as these mills rebuild their log inventories during the third quarter." For the third quarter, the company expects many mills in the western areas of the south to rebuild severely depleted log inventories. This should temporarily boost sawlog prices in the region. Harvest volumes for both the Northern and Southern Resource segments will be higher in the third quarter compared with the second quarter due to normal seasonal factors. Plum Creek said it expected earnings for the manufacturing segment to moderate as lumber and plywood prices recede from the very strong levels experienced during the second quarter The company expects to earn 30 to 35 cents a share in the third quarter, just above the consensus analyst estimate of 29 cents a share. For the fourth quarter, the company expects to earn 30 to 35 cents a share. The consensus estimate is 30 cents a share.