Sign in

You're signed outSign in or to get full access.

PC

POTLATCHDELTIC CORP (PCH)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid sequential improvement with revenue $0.268B and diluted EPS $0.33, outperforming Wall Street consensus on both revenue and EPS. Strength was broad-based across Timberlands, Wood Products, and Real Estate, with Total Adjusted EBITDDA up to $63.4M (23.6% margin) . Results beat consensus: EPS $0.33 vs $0.17* and revenue $268.3M vs $244.8M*; EBITDA essentially in line/slightly above at ~$52.6M actual vs ~$52.0M* .*
  • Waldo (AR) sawmill ramp completed three months ahead of schedule; production run-rate achieved for annual nameplate capacity of 275 MMBF, lowering cash processing costs ~30% and expected to add ~$25M incremental EBITDDA annually at mid-cycle pricing .
  • Q2 outlook: Timberlands earnings should seasonally decline (lower harvest and +$4M higher forest management/roads), while Wood Products earnings expected higher; company guides lumber shipments to 300–310 MMBF and quarter-to-date average lumber price ~$475/MBF (≈5% above Q1) on ~100 MMBF sold .
  • Capital allocation: repurchased 93,100 shares for $4.1M at $45 in Q1 and “another $4M at $40” early Q2; liquidity remained strong at $447M as of March 31, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Timberlands EBITDDA +$8.4M QoQ on higher Northern harvest volumes, +9% Northern sawlog prices (indexed and cedar), and seasonally lower forest management costs .
  • Waldo sawmill modernization/expansion completed early; achieved key production metrics (recovery, cost reduction), ramp-up complete, and expected ~$25M annual EBITDDA uplift at mid-cycle pricing .
  • Real Estate EBITDDA +$3.3M QoQ with 7,043 acres sold at $3,303/acre and 11 Chenal lots at $112,745/lot, supporting consolidated margin expansion .

Management quotes:

  • “We delivered solid operational results across all business segments despite prevailing economic and trade policy uncertainties.” — Eric Cremers, CEO .
  • “Waldo…completed three months ahead of schedule…significantly improving the competitiveness of the mill.” — Eric Cremers .

What Went Wrong

  • Southern sawlog prices declined QoQ due to a higher mix of smaller-diameter logs (weather/access constraints) despite otherwise stable regional pricing .
  • Wood Products log costs increased in Idaho (indexed pricing), partially offsetting benefits from higher lumber price realization (+2% QoQ to $454/MBF) .
  • Near-term macro remains “tepid” for end markets; channel inventories (north) digesting pre-tariff buys; management expects volatility with price risk skewed to upside later in year but markets currently flat demand-wise .

Financial Results

Reported Results vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Revenues ($USD Millions)$228.1 $258.1 $268.3
Net Income ($USD Millions)$(0.3) $5.2 $25.8
Diluted EPS ($USD)$0.00 $0.07 $0.33
Total Adjusted EBITDDA ($USD Millions)$29.7 $53.3 $63.4
Total Adjusted EBITDDA Margin (%)13.0% 20.7% 23.6%
Operating Income ($USD Millions)$(4.8) $13.3 $27.5
Net Cash from Operations ($USD Millions)$16.0 $45.4 $49.1

Actual vs Wall Street Consensus (S&P Global)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$255.1 actual $258.1 actual $268.3 actual
Revenue Consensus ($USD Millions)$241.3*$247.2*$244.8*
Primary EPS (USD)$0.04 actual $0.07 actual $0.33 actual
EPS Consensus (USD)$(0.073)*$(0.012)*$0.174*
EBITDA ($USD Millions)$32.9*$39.9*$52.6*
EBITDA Consensus ($USD Millions)$42.7*$46.7*$52.0*

Values with asterisks retrieved from S&P Global.

Segment Breakdown

Segment MetricQ1 2024Q4 2024Q1 2025
Timberlands Revenues ($MM)$92.95 $95.29 $102.45
Timberlands Adjusted EBITDDA ($MM)$34.75 $34.03 $42.37
Wood Products Revenues ($MM)$148.60 $160.34 $164.65
Wood Products Adjusted EBITDDA ($MM)$(0.14) $8.87 $11.64
Real Estate Revenues ($MM)$11.11 $25.09 $27.59
Real Estate Adjusted EBITDDA ($MM)$6.23 $19.36 $22.76

KPIs

KPIQ4 2024Q1 2025
Avg Lumber Price ($/MBF)$445 $454
Lumber Shipments (MMBF)283 290
Rural Acres Sold5,919 7,043
Avg Price per Rural Acre ($)$2,923 $3,303
Chenal Lots Sold45 11
Avg Price per Chenal Lot ($)$100,000 $112,745
Liquidity ($MM)$451 $447
Cash & Equivalents ($MM)$151.6 $147.5
Share Repurchases ($MM)$8.0 in Q4 $4.1 in Q1; $4.0 early Q2

Non-GAAP note: Adjusted Net Income $26.2M (adds $0.37M after-tax environmental charge); Total Adjusted EBITDDA reconciled in release .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Lumber ShipmentsQ1 2025270–280 MMBF (Q4 call) Actual 290 MMBF (above upper end) Beat vs guide
Avg Lumber PriceQ1 2025~$448/MBF QTD (Q4 call) Actual avg $454/MBF Higher than QTD
Timberlands HarvestQ2 2025—1.6–1.7M tons; ~82% South; North seasonally lower; pricing mostly flat North/South New
Lumber ShipmentsQ2 2025—300–310 MMBF; would set quarterly record New
Avg Lumber PriceQ2 2025—~$475/MBF QTD on ~100 MMBF; full quarter “flattish” vs Q1 New
Real EstateQ2 2025—~8,000 rural acres; ~20 Chenal lots New
Total Adjusted EBITDDAQ2 2025—Lower vs Q1 due to seasonality in Timberlands and +$4M roads/forest mgmt New
Dividend2025$0.45/qtr (ongoing) Declared $0.45 payable 6/30/25 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Tariffs/DutiesDuty floor rising; BC breakeven ~$400, duties to increase in 2025 Canadian duties likely to 25–30%+ by Nov; price floor rising; potential tariffs (Section 232) Section 232 initiated; “all others” Canadian duty prelim. >34%; price risk skewed to upside Increasing regulatory support to prices
Lumber Pricing & DemandRecovery from trough; capacity curtailments aided prices Prices up QoQ; mills profitable in Q4; expect flattish-to-up near term Q2 avg ~$475/MBF QTD; tepid demand, upside risk H2 2025 Gradual improvement with volatility
R&R/Home CenterSluggish earlier; pent-up tailwinds Big-box comps expected modestly positive in 2025 Home center takeaway strong; YTD volumes ~4% above prior year Improving
Waldo SawmillRamp initiated; start-up costs weighed Q3 Ramp progressing; processing costs dropping; full ramp mid-2025 Ramp completed early; 275 MMBF run-rate; ~30% cost reduction Ahead of plan; structural margin uplift
NCS (Solar/Lithium/Carbon)Solar options >35k acres ($~400M NPV); lithium prospects; carbon project being designed Plan to add 10–12k acres in 2025; ~$575M NPV by YE; solar/lithium resilient; carbon/CCS more policy-sensitive Solar options expanded +3k acres to 38k (NPV ~$475M); executed lithium brine lease (900 acres), carbon offset feasibility ongoing Pipeline expanding; monetization 2026–27+

Management Commentary

  • “Our financial performance improved compared to the fourth quarter in all 3 business units…positive effects of our strategic investment in the Waldo…expected to generate approximately $25M in incremental EBITDDA annually” — Eric Cremers .
  • “Share repurchases remain more attractive than acquiring timberlands…we purchased $4M in Q1 at $45 and another $4M at $40 so far this quarter” — Eric Cremers .
  • “We have $447M in liquidity; net interest expense ~$2M in Q1 given Farm Credit patronage” — Wayne Wasechek .

Q&A Highlights

  • Demand and pricing: Near-term demand “decent” with South firmer than North as northern channels digest inventory; inventories generally low given high carrying costs .
  • Q2 earnings bridge: Wood Products expected up (shipments/prices); Timberlands down on seasonality and +$4M forest management/roads vs Q1 .
  • Tariffs/duties: Canadian duty prelim. >34%; Section 232 investigation could add tariffs; BC higher-cost mills likely curtailments; price floor rising .
  • Species substitution: Homebuilders increasingly substituting Southern Yellow Pine for SPF; chatter accelerating .
  • Real Estate markets: Strong rural demand (conservation/recreation), robust bidder interest for high-quality large tracts; pipeline guided at ~8k acres Q2 .
  • NCS timing: Solar options (38k acres, ~$475M NPV) progressing; earliest lease conversions likely 2026–27; lithium lease signed (900 acres), awaiting royalty clarity; carbon offsets targeted within 18–24 months .

Estimates Context

  • Q1 2025 beats: Revenue $268.3M vs $244.8M*; EPS $0.33 vs $0.17*; EBITDA ~$52.6M vs ~$52.0M* (essentially in-line) .*
  • Prior quarters: Q4 2024 beat revenue ($258.1M vs $247.2M*) and EPS ($0.07 vs -$0.01*); EBITDA below consensus (actual ~$39.9M vs ~$46.7M*) .*
  • FY trajectory: FY 2025 consensus EPS ~$0.668* and revenue ~$1.09B*; Target price consensus $47.5* (8 estimates)*.

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 momentum across all segments, with consolidated margins expanding; Waldo’s early completion and cost reduction create durable earnings power and lower unit costs going forward .
  • Near-term setup: Management guides Q2 total Adjusted EBITDDA lower vs Q1 on Timberlands seasonality, offset by higher Wood Products earnings; traders should watch weekly lumber prints and Q2 shipment cadence (300–310 MMBF target) .
  • Policy catalysts: Canadian duty increase (prelim. >34%) and potential Section 232 tariffs elevate price floors, skewing price risk to upside into H2; higher duties could tighten Canadian supply and lift U.S. producers’ realizations .
  • Real Estate optionality remains strong (acreage sold at premiums), providing non-cyclical cash flows and supporting consolidated margins; Q2 acreage/lot sale guidance implies continued contribution .
  • NCS pipeline (solar/lithium/carbon) is expanding, with meaningful cash flows likely beginning 2026–27; interim option payments provide incremental income streams today .
  • Capital allocation: Active buybacks with shares trading below management’s NAV view; robust liquidity and low-cost debt (revolver undrawn) enable opportunistic repurchases/refinancing .
  • Watch list: Southern sawlog mix/price sensitivity (weather and stumpage mix), Idaho log cost indexation, and forest management expense seasonality (+$4M in Q2) as key moving pieces for quarterly earnings volatility .