Will Plum Creek Timber (PCL) Stock Rise Following A Positive First Quarter Earnings Report?

NEW YORK (TheStreet) -- Plum Creek Timber  (PCL) shares are flat in after-market trading following the release of the company's first quarter earnings results.

The company posted earnings of $30 million, or 17 cents per diluted share, beating analysts consensus estimates by 2 cents.

Plum Creek also posted revenue of $137 million, beating analysts consensus estimates of $134 million for the quarter. 

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TheStreet Ratings team rates PLUM CREEK TIMBER CO INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate PLUM CREEK TIMBER CO INC (PCL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • PLUM CREEK TIMBER CO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PLUM CREEK TIMBER CO INC increased its bottom line by earning $1.31 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $1.31).
  • PCL, with its decline in revenue, underperformed when compared the industry average of 8.7%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, PLUM CREEK TIMBER CO INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 49.4% when compared to the same quarter one year ago, falling from $79.00 million to $40.00 million.
  • You can view the full analysis from the report here: PCL Ratings Report
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