D.A. Davidson & Co. has increased its estimate of Potlatch Corp.s fourth-quarter earnings, to 28 cents a share from 21 cents, and also has boosted its estimate of the Spokane wood-products companys annual earnings for 2006.


In addition, D.A. Davidson, a Great Falls, Mont.-based regional stock brokerage, has retained its buy rating on Potlatchs stock, saying that its target for the companys stock price remains at $57 a share. Potlatchs stock has traded between $50 and $57 a share recently.


The brokerage firm says it bumped up its estimate on Potlatchs fourth-quarter earnings as we believe that conditions in the tissue markets and log volumes were better than previously anticipated. Potlatch will release its fourth-quarter 2005 earnings on Feb. 6.


For all of 2006, D.A. Davidson now expects Potlatch to earn $1.41 a share, up from the brokerages earlier estimate of $1.35 a share.


Potlatch doesnt comment on analysts estimates of the companys earnings, spokesman Mike Sullivan says.


Under the SEC rules, we dont even give guidance to the people who follow our stock on Wall Street, Sullivan says. He says the company will put out a warning if it believes that estimates are way over or way below the amount the company expects to earn, but it hasnt put out such an estimate recently, and he knew of no plans for one.


D.A. Davidson says its previous estimates already had reflected Potlatchs conversion to a real estate investment trust from a taxable C-corporation, which Potlatch completed Jan. 1. Potlatch, like other land-rich forest-products companies, made the conversion to pass through cash generated from timber harvesting to shareholders while paying minimal taxes at the corporate level, D.A. Davidson says.


In a brief report by staff analyst Steven Chercover that it released earlier this month, D.A. Davidson said, For what its worth, we believe Potlatchs trend earnings power as a REIT is approximately $182 per share. Trend earnings are estimated long-term annual earnings.


Potlatch has scheduled a shareholders meeting and a board meeting Feb. 3 and expects to announce that day that it will pay in the first quarter a special dividend, which the company has estimated will total between $440 million and $480 million. Through that dividend, it will distribute all earnings and profits that it accumulated before Jan. 1, which its obligated to do through its conversion to a REIT. The company also expects to announce that it will pay a 65-cent-a-share dividend for the first quarter of this year, Sullivan says.


D.A. Davidson also complimented Potlatch on its recent hiring of Mike Covey to take over on Feb. 6 as president and CEO from Penn Siegel, who has said he will stay on as the companys chairman through the end of this year. D.A. Davidson said Covey will be a strong addition to the management team.