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On Feb 14, 2014, we issued an updated research report on Plum Creek Timber Company Inc. (PCL - Analyst Report). Hurt by higher expenses tied to the Southern Timberlands acquisition, the company’s fourth-quarter 2013 earnings fell substantially from the prior year. Moreover, lower operations in the real estate segment in the quarter added to the woes.

The company reported fourth-quarter 2013 earnings of 24 cents per share, well below the prior-year quarter figure of 49 cents. However, excluding these expenses, Plum Creek’s adjusted earnings came in at 31 cents, which exceeded the Zacks Consensus Estimate of 28 cents.

Decreasing harvest volume in the Northern segment has been weighing on Plum Creek’s results over the past few quarters. Furthermore, the cyclical nature of the business, stiff competition and strict environment policies remain causes of concern. As such, we remain skeptical about the company’s growth prospects.

Analysts turned more bearish on the stock’s future performance. This is evident from the movement witnessed in the Zacks Consensus Estimate that decreased 11.9% to $1.40 for 2014 and 7.3% to $1.64 per share for 2015, over the past 30 days.

Plum Creek currently carries a Zacks Rank #4 (Sell).

Key Picks from the Sector

Some better-ranked stocks in the same industry worth considering include Universal Forest Products Inc. (UFPI - Analyst Report), Potlatch Corp. (PCH - Snapshot Report) and Weyerhaeuser Co. (WY - Analyst Report). While Universal Forest Products carries a Zacks Rank #1 (Strong Buy), Potlatch and Weyerhaeuser have a Zacks Rank #2 (Buy).

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