Replies to post #434 on The Rising Influence of Rising Affluence

[DewDiligence]

The $53/sh fair value of PCL calculated in the header of the previous post is a 70% premium to the current market price.

[DewDiligence]

PCL’s 4Q09 results are consistent with my $53/sh assessment of fair value, as described in the prologue of #msg-43004163.

Expected land sales in 2010 are $350-370M derived from approximately 160K acres, which works out to $2,250/acre. This is somewhat higher than PCL’s typical yield from land sales because the property to be sold in 2010 is weighted toward recreational use.

Management said on the 4Q09 CC that the average cost basis of the land to be sold in 2010 is 35%, which implies that the selling price will be roughly 3x book value, consistent with my calculations in #msg-43004163. (Note that as a REIT, PCL pays no capital-gains taxes on its land sales.)

PCL’s 4Q09 PR:
http://finance.yahoo.com/news/Plum-Creek-Reports-Results-bw-2955097310.html?x=0&.v=1

Transcript of 4Q09 CC:
http://seekingalpha.com/article/185880-plum-creek-timber-co-inc-q4-2009-earnings-call-transcript

[DewDiligence]

PCL posts solid 1Q13 results (although quarter-by-quarter details hardly matter in PCL’s business):

http://finance.yahoo.com/news/plum-creek-reports-results-first-200500944.html

Plum Creek Timber Company, Inc. today announced first quarter earnings of $56 million, or $0.35 per diluted share, on revenues of $340 million.

… “The financial performance of each of our business segments improved compared to the first quarter of 2012. We’re on-track to grow our non-real estate adjusted EBITDA by $50 million this year. Our first quarter growth in this area was $12 million,” said Rick Holley, chief executive officer.

“Earnings and cash flow from our timber resources and manufacturing segments are rising and we’re expecting good follow-through in these trends for the remainder of the year.”

… the company expects 2013 income to be between $1.25 and $1.50 per share. The company expects to report second quarter income between $0.20 and $0.25 per share.

The US housing recovery is well underway and PCL’s trees keep growing.

My fair-value estimate of $53+/sh made in 2009 (#msg-43004163) no longer seems far-fetched, LOL.