Weak Guidance Fells Plum Creek Timber Shares

Shares of Plum Creek Timber fell up to 6% in post-market trading after the company reported fourth quarter results and gave earnings guidance that was below analysts' expectations.

The company said profits rose to $69 million or 39 cents a share, including a $14 million or seven cent a share gain from the settlement of a lumber trade dispute between the U.S. and Canada. Analysts polled by Thomson Financial expected 34 cents a share.

Plum Creek said improved performance at its real estate unit offset weaker results from timber and manufacturing.

In last year's fourth quarter, Plum Creek earned $64 million or 34 cents a share.

Plum Creek also gave earnings guidance of 18 to 23 cents a share for the first quarter of 2007 -- well below consensus estimates of 43 cents. For all of 2007, Plum Creek now expects earnings of $1.40 to $1.60 a share. Analysts were looking for $1.75.

Plum Creek said it anticipates that residential construction markets will stabilize with the potential for gradual improvement as the year progresses, ultimately leading to improved sawlog demand and pricing.

The company plans to reduce harvesting activity between 5% and 7% for both sawlogs and pulpwood in the Northern Resources segment during 2007. Overall harvests should be between 19.5 million and 20.5 million tons of timber during 2007, Plum Creek said.

With interest in rural real estate continuing, it expects real estate segment sales for the year to increase to between $330 million and $350 million.