Last week, we posted how Plum Creek (PCL) and Potlatch (PCH) offset weak log markets in 2Q 2011 with land sales. The balance of the public timber REITs, Rayonier (RYN) and Weyerhaeuser (WY), have also reported their results and, as expected, housing-exposed business segments exhibited weakness.  Alternately, improved log volume and pricing in the Pacific Northwest and stronger results from their Fibers businesses provided good news.

On July 28, 2011, RYN reported 2Q 2011 net income of $56 million or $0.67 per share, up from $0.48 per share in 2Q 2010, but six cents short of the consensus estimate. Forest Resources had operating income of $11.8 million, up from $8.7 million for prior-year quarter, thanks to higher harvest volumes and improved export pricing in the Northwest and New Zealand. The company continues to defer harvest in its Atlantic and Gulf regions. Real Estate income was $5.0 million, just up from $4.1 million in the prior-year quarter.  During the quarter, the company acquired or had contracts pending for ~65,000 acres of timberlands. Performance Fibers operating income was $71.1 million, up from $45.0 million in the prior-year quarter, due to improved pricing. Wood Products showed an operating loss of $1.0 million compared with income of $4.3 million in 2Q 2010, primarily due to weaker lumber prices. Management maintained its guidance for FY 2011 earnings of between $2.85 and $3.10 per share, on a pre-split basis. RYN recently announced a three-for-two stock split and an 11% increase in the quarterly dividend.

On July 29, 2011, WY reported 2Q 2011 net operating earnings (before special items) at $0.06 per share, down from $0.20 per share in the same quarter a year ago and three cents short of the consensus estimate. The Timberlands segment reported operating income of $111 million, up from $69 million a year ago. Higher volumes and prices in the West, resulting from stronger demand from China, Japan and Korea supported the results. Cellulose Fibers had operating income of $81 million, up from $76 million in 2Q 2010, due to higher prices. Wood Products resulted in an operating loss of $61 million, compared with a loss of $4 million in the prior-year quarter. Real Estate reported a decline in operating income to $8 million from $27 million in the quarter a year ago. WY expects lower income from the Timberland segment in 3Q 2011, due to slowing export demand and higher costs. Previously announced sales of the hardwood and shipping businesses will close during the third quarter.