Spokane Journal of Business

Potlatch posts earnings increase

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Potlatch Corp., of Spokane, today reported first-quarter net income of $20.3 million, or 50 cents a diluted share, up from $15.5 million, or 38 cents a share, in the first quarter of 2013.

The company reported an increase of more than $300,000 in revenue for the latest quarter, to $139.6 million from $139.3 million in the year-earlier quarter.

Michael Covey, the company’s chairman and CEO, says Potlatch managed all of its business segments well, given the effects of the winter weather, and delivered solid results in the first quarter.

“We continue to believe housing starts will exceed 1 million in the U.S. this year and are seeing signs that the pace is picking up as we move into spring,” Covey says. “As a result, we expect demand and prices for Idaho sawlogs and lumber to remain strong. We believe that Southern pine sawlog prices in our wood basket will recover over the longer term. Our real estate business continues to perform well and closed the first of two large transactions planned for this year in the first quarter.”

Covey says Potlatch continues to generate cash well in excess of its dividend, and strong liquidity provides it a high degree of financial flexibility.

Real estate operating income was $8.3 million on revenues of $14.4 million in the first quarter, compared with operating income of $4.6 million on revenues of $6.8 million in the fourth quarter of 2013. First quarter results included the sale of 11,000 acres of rural recreation property in Idaho for $11 million.

The company says average lumber prices were 7 percent higher than in the fourth quarter of 2013, while lumber shipments were 5 percent lower due mostly to the effect of weather conditions on transportation. It says it expects delayed shipments to benefit second quarter results.

Judith  Spitzer
  • Judith Spitzer

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Reporter Judith Spitzer covers technology, mining, agriculture, and wood products for the Journal. A vintage-obsessed antique collector in her off hours, Judith worked as a journalist in Colorado and Oregon before joining the Journal.

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