Potlatch: Housing market recovery expected to continue

Potlatch Corp.’s profit in the last quarter of 2016 was four times that of the same quarter a year earlier, the Spokane-based forestry, wood products and real estate company reported this week.

Net income was $14.4 million, or 35 cents per diluted share, on revenues of $155.7 million for the quarter that ended Dec. 31. That compares to net income of $3.5 million, or 9 cents per share, on revenues of $138 million in the fourth quarter of 2015.

The year-end profit was reported at $10.9 million, or 27 cents per share, on revenues of $599 million. That reflects an after-tax loss of $36.7 million on the sale of 172,000 acres in central Idaho. Excluding the impact of that sale, profits were $47.6 million, or $1.16 per share, in 2016.

For 2015, the company reported a profits of $31.7 million, or 77 cents per share, on revenues of $575 million.

“Strong performance by each of our three businesses and improved lumber prices resulted in solid earnings this year,” said Mike Covey, chairman and CEO, in a statement. “Our mills continue to run well and we achieved new quarterly production records in the third and fourth quarters.”

Potlatch said it reduced net debt by $125 million last year and returned $67 million to shareholders via dividends and share repurchases.

Covey said the company expects the U.S. housing market to continue a modest pace of recovery, with at least 1.2 million housing units built this year.

He also said lumber prices are expected to be volatile through 2017 as a result of a softwood lumber trade dispute with Canada. Imports of subsidized Canadian lumber have put a damper on domestic prices, the U.S. lumber industry contends.

Canada’s lumber industry is bracing for a dramatic shift in trade deals under the Trump administration, which has signaled a protectionist posture. British Columbia supplies half of Canada’s softwood lumber exports to the U.S.

Potlatch plans to harvest 4.2 million tons of wood and sell about 20,000 acres this year, Covey said.

Potlatch trades on the Nasdaq under the stock ticker PCH.