PotlatchDeltic (PCH) Q4 Earnings Miss Estimates, Shares Down
PotlatchDeltic Corporation’s PCH shares declined 5% in the after-hour trading session on Jan 29, after the company reported mixed results for fourth-quarter 2023. Its earnings missed the Zacks Consensus Estimate while revenues topped the same.
On a year-over-year basis, earnings declined but the revenues increased.
The company’s quarterly results reflect solid contributions from the Real Estate business attributable to capitalizing higher value opportunities from the stratification of CatchMark timberlands. This was partially offset by the tepid performance of its Timberlands and Wood Products businesses along with the increased cost of sales.
Nonetheless, the company is optimistic about entering 2024, given its agreement with Forest Investment Associates to sell about 34,000 acres of four-year average-age Southern timberlands for approximately $58 million. Subject to customary closing conditions, once closed, this transaction is expected to further enhance the company’s liquidity position and increase the flexibility of its capital allocation strategy. Thus, this will aid PCH to continue to enhance its shareholder value.
Inside the Headlines
The company reported break-even earnings, missing the Zacks Consensus Estimate of 2 cents per share by 100%. In the year-ago quarter, the company reported earnings of 12 cents per share.
Potlatch Corporation Price, Consensus and EPS Surprise
Potlatch Corporation price-consensus-eps-surprise-chart | Potlatch Corporation Quote
Revenues for the quarter were $254.5 million, beating the consensus mark of $239.8 million by 6.1% and increasing 0.6% from $253.1 million reported in the prior-year quarter.
Adjusted EBITDDA was $40.7 million, down 22.2% from $52.3 million in the year-ago period. Also, the adjusted EBITDDA margin declined 470 basis points (bps) to 16% year over year.
Segment Details
Timberlands: Revenues (including inter-segment revenues) from the segment were $97.4 million, down 20.1% from the year-ago figure of $121.9 million. Adjusted EBITDDA was $33.3 million, down from $50.6 million in the year-ago quarter.
Wood Products: For the quarter, the segment’s revenues totaled $150.1 million, down 4.3% from $156.8 million reported in the year-ago period. Adjusted EBITDDA was $(6.5) million against $2.4 million reported a year ago.
Real Estate: The segment’s quarterly revenues amounted to $27.9 million, up by a whopping 138.5% from $11.7 million reported a year ago. Adjusted EBITDDA was $21.9 million, indicating growth from $7.2 million reported in the year-ago period.
2023 Highlights
For the full year, adjusted earnings were 43 cents per share, indicating a decrease of 91% from earnings of $4.80 per share reported in 2022. Revenues were $1.02 billion, which declined 23.3% from $1.33 billion reported a year ago.
The adjusted EBITDDA of $200.2 million decreased 65.1% from $574.2 million reported in 2022.
Financial Highlights
As of Dec 31, 2023, PotlatchDeltic had cash and cash equivalents of $230.1 million, down from $343.8 million in 2022 end. Long-term debt was $858.1 million at the quarter’s end, down from $992.7 million in 2022 end.
Net cash from operations was $41.8 million for the fourth quarter and $159.1 million for 2023 versus $33.5 million and $491.9 million reported in the respective year-ago period.
Q1 2024 Outlook
PCH expects its first-quarter 2024 adjusted EBITDDA to be moderately lower sequentially due to lower rural real estate sales activity. The quarter’s capital expenditures are expected to be within $20-$25 million.
For 2024, the company expects capital expenditures to lie between $100 million and $110 million.
Zacks Rank
PotlatchDeltic currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Construction Releases
Weyerhaeuser Company WY reported mixed results for fourth-quarter 2023. Its earnings beat the Zacks Consensus Estimate but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West and a decrease in the domestic sales volumes. The company optimized its timberlands holdings with the strategic acquisition of mature and highly productive acreage in the Carolinas and Mississippi and the divestiture of less strategic acreage in South Carolina. Also, it captured additional operational excellence improvements, grew its Natural Climate Solutions business and sold its first forest carbon credits in the voluntary market.
United Rentals, Inc. URI reported impressive fourth-quarter 2023 results. Its earnings and revenues beat the Zacks Consensus Estimate and increased on a year-over-year basis.
The upside was mainly driven by sustained growth across the business, profitability and returns, underpinned by broad-based activity. Moreover, URI has provided strong guidance for 2024, given the strength of the present market condition and the multi-year tailwinds that the company sees across infrastructure, manufacturing, energy and power.
D.R. Horton, Inc. DHI reported first-quarter fiscal 2024 (ended Dec 31, 2023) results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
On a year-over-year basis, both the top and bottom lines increased. The upside was backed by the supply of both new and existing homes as affordable price points remain limited and robust housing demand is supported by favorable demographics amid elevated inflation and mortgage/interest rates.
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