Separately, TheStreet Ratings downgraded the stock to a "hold" rating from "buy" while also lowering its letter grade to C from B. TheStreet identified several strengths in the company, including expanding profit margins and notable return on equity. However, as a counter to these strengths, it also found weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.
The Seattle-based timber company reported fourth quarter earnings of $34 million, or 23 cents per share on an adjusted basis, ahead of analysts' expectations of earnings of 16 cents per share. The company reported revenue of $323 million in the period beating analysts' $310.8 million guidance.
For the year, the company made a profit of $197 million, or $1.12 per share on revenue of $1.45 billion.
In November last year, Plum Creek announced that it had agreed to a merger with real estate investment trust and fellow timberland owner Weyerhaeuser (WY). The company said that it took a transaction cost of 4 cents per share in the quarter related to the pending merger.
On Thursday, TheStreet chartist Bruce Kamich commented on the company's chart.
"Take a minute to look at this chart of PCL, above. It surges to the upside in November with a huge gap on the upside and huge volume. Unfortunately, the story does not have a happy ending, as the rally quickly evaporates and prices tumble below where the rally started! Insult to injury? We also want to point out that the On-Balance-Volume (OBV) line is now below its November low. The Moving Average Convergence Divergence (MACD) oscillator went to a sell signal at the beginning of January when it crossed below the zero line," Kamich said.
"This longer-term chart, above, of PCL shows that probes below $40 were bought over the past two years. However, with the weak technical position of PCL and a weak overall stock market, PCL is at risk to fall further. It could drop to $35 or lower," Kamich concluded.
TheStreet Ratings uses an algorithmic model to determine a rating for risk-adjusted total return prospect over 12 months.