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POTLATCHDELTIC CORP (PCH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clean beat: revenue $314.2M and adjusted EPS $0.36 (GAAP $0.33), driven by outsized Real Estate performance; Total Adjusted EBITDDA rose to $89.3M with margin 28.4% .
  • Versus consensus, revenue and EPS both beat; the company also expanded adjusted EBITDDA sequentially from $52.0M in Q2 to $89.3M in Q3 on stronger rural and development land sales ; estimates context below.
  • Management guided Q4 lower on seasonally softer timberland volumes and index pricing in Idaho, fewer real estate acres, and cooler production conditions; lumber shipments guided to 290–300 MBF with average price tracking near Q3 levels .
  • Strategic catalyst: definitive merger agreement with Rayonier to create a scaled U.S. land resources and lumber platform; company reiterated expected closing late Q1/early Q2 2026 and identified ~$40M synergy opportunity on the call .

What Went Well and What Went Wrong

  • What Went Well

    • Real Estate outperformed: 15,636 rural acres sold at $3,280/acre; 55 residential lots at $138,938/lot; two large Georgia deals totaling ~$39M; segment Adjusted EBITDDA jumped to $63.1M from $22.7M in Q2 .
    • Timberlands steady with seasonal lift: revenues $108.0M; Adjusted EBITDDA $41.0M; Northern harvest volume and Idaho seasonal conditions supported quarterly peak production .
    • Cost execution in Wood Products: lowest per-unit manufacturing cost since Q2 2021; shipments rose to 333 MBF despite weak lumber pricing; positioned well for eventual pricing recovery .

  • What Went Wrong

    • Lumber pricing declined 12% QoQ to $396/MBF; Wood Products Adjusted EBITDDA fell to -$2.5M as demand remained muted and industry oversupply persisted .
    • Idaho sawlog prices softened; log and haul costs increased due to steep terrain and longer distances; expected further Idaho index price decline (~13%) in Q4 .
    • Outlook constrained: Q4 total Adjusted EBITDDA guided lower on fewer real estate acres and seasonally lower timber harvest volumes and pricing; near-term housing/remodel segments remain subdued .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$255.1 $275.0 $314.2
Net Income ($USD Millions)$3.3 $7.4 $25.9
Diluted EPS ($USD, GAAP)$0.04 $0.09 $0.33
Adjusted Net Income ($USD Millions)$3.3 $7.4 $27.8
Adjusted EPS ($USD)$0.04 $0.09 $0.36
Total Adjusted EBITDDA ($USD Millions)$45.9 $52.0 $89.3
Total Adjusted EBITDDA Margin (%)18.0% 18.9% 28.4%
Net Cash from Operations ($USD Millions)$26.5 $41.0 $65.7

Segment breakdown

Segment MetricQ3 2024Q2 2025Q3 2025
Timberlands Revenue ($USD Millions)$105.1 $101.7 $108.0
Timberlands Adjusted EBITDDA ($USD Millions)$35.8 $39.6 $41.0
Wood Products Revenue ($USD Millions)$139.4 $171.8 $165.9
Wood Products Adjusted EBITDDA ($USD Millions)-$9.6 $1.7 -$2.5
Real Estate Revenue ($USD Millions)$38.7 $29.1 $69.6
Real Estate Adjusted EBITDDA ($USD Millions)$31.9 $22.7 $63.1

KPIs (operations and sales mix)

KPIQ3 2024Q2 2025Q3 2025
Average Lumber Price ($/MBF)—$450 $396
Lumber Shipments (MBF)—303 333
Rural Acres Sold—7,457 15,636
Avg Price per Rural Acre ($)—$3,108 $3,280
Residential Lots Sold—18 55
Avg Price per Residential Lot ($)—$102,222 $138,938
Commercial Acres Sold——13
Avg Price per Commercial Acre ($)——$532,942

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Timberlands harvest volume (total, mm tons)Q4 2025Not provided1.7–1.8, ~80% South New
Idaho sawlog prices (index pricing)Q4 2025Not provided~-13% QoQ (lagged index) Lowered
Southern sawlog pricesQ4 2025Not providedSlight decline (mix/inventory balance) Lowered
Lumber shipments (MBF)Q4 2025Not provided290–300 New
Average lumber price ($/MBF)Q4 2025Not provided~$397 to date on ~120 MBF, near Q3 Maintained
Rural acres soldQ4 2025Not provided~5,000 acres at ~$3,200/acre Lower vs Q3 mix
Residential lots closedQ4 2025Not provided~46 lots at ~$95,000/lot Lower vs Q3 mix
Total Adjusted EBITDDAQ4 2025Not providedLower than Q3 Lowered
Full-year CapEx (excl. timberland acquisitions)FY 2025$60–$65M reaffirmed$60–$65M Maintained
DividendNear-termRegular quarterly dividend paid$0.45/share paid in Q3 Maintained payout cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Lumber pricing and tariffsQ1: Waldo ramp, modest price uptick (+2%); Q2: pricing down 1%, soft market demand Prices down 12% QoQ to $396/MBF; commentary on Canadian duties, Section 232 tariffs; expectation of stabilization and marginal Q4 uptick; curtailments to support 2026 improvement Stabilizing; cautious near-term, constructive 2026
Wood Products operationsQ1: manufacturing costs improved with Waldo; Q2: processing costs impacted by upgrades/power issue Lowest per-unit cost since Q2’21; shipments up to 333 MBF despite loss Operational execution improving
Timberlands pricing/volumeQ1: Idaho indexed/cedar up; South prices mixed Idaho sawlog pricing down; higher log/haul costs; Q4 index pricing to decline ~13% Seasonal/price pressure near term
Real Estate demand & conservationQ1/Q2: steady acres/lot sales; Q2 Real Estate EBITDDA flat Strong rural and development sales; two GA deals (~$39M); ~25% of rural revenue from 10k acres conservation YTD; prices up ~10% YoY on consistent mix Robust, but lumpy
Natural climate solutions (solar, lithium)Q1/Q2: environmental charge; Waldo project; no lithium specifics 34k acres under solar options, expected 40–45k by YE; new Exxon subsidiary lease (Saltworks) ~4,200 acres; total >5,000 acres under Smackover mineral leases Expanding pipeline
Housing & R&R macroQ1/Q2: demand uncertainty; tariffs noted Mortgage rates lower; affordability best in 2.5 yrs; R&R muted but stable; home center demand improved through Q3 Incrementally positive housing; R&R stable
Capital allocationQ2: ~$56M repurchases; liquidity $395M $60M H1 repurchases; Q3 liquidity $388M; $100M debt refinanced; WACD ~2.3% Balanced; limited buybacks pre-merger
Strategic M&A (Rayonier)Not discussed in Q1/Q2 results releasesMerger agreement; ~4.2M acres combined; ~$40M synergies; close late Q1/early Q2 2026 Transformational

Management Commentary

  • “Our Real Estate segment captured opportunities to maximize timberland values, including two significant rural land sales in Georgia. In addition, our Wood Products segment delivered disciplined cost management, reinforcing operational resilience…” — Eric Cremers, CEO .
  • “We finished the quarter with $388 million in liquidity… successfully refinanced $100 million of debt… maintains our weighted average cost of debt at approximately 2.3%.” — Wayne Wasechek, CFO .
  • “We estimate synergies of $40 million… close the transaction in late in the first quarter or early in the second quarter of 2026.” — Eric Cremers, CEO, on Rayonier merger .
  • “We believe lumber prices have reached their low point for the year and have generally stabilized… curtailments… will gain traction to support improved domestic lumber pricing.” — Eric Cremers, CEO .

Q&A Highlights

  • Pulpwood markets: despite closures and capacity reductions, PCH’s scale/diversification keeps log takeaway steady; merger enhances diversification further .
  • Wood Products strategy: run mills hard to lower per-unit costs and absorb overhead; expect modest price improvement in Q4 (2–4%), but overall flat excluding price .
  • Real Estate: outperformance driven by large conservation sale; ~25% of rural revenues tied to ~10k conservation acres YTD; pricing up ~10% YoY on consistent mix .
  • Inventories: lumber channel inventories lean; dealers rely on just-in-time deliveries .
  • Lithium lease economics: too early to guide; dependent on lithium price and extraction yields; timing contingent on processing plant build (Exxon subsidiary) .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD)$244.8M*$260.9M*$296.9M*
Revenue Actual ($USD)$268.3M*$275.0M*$314.2M*
Primary EPS Consensus Mean ($)$0.174*$0.104*$0.182*
EPS Actual (Primary) ($)$0.33–$0.36*$0.09*$0.33–$0.36*

Values retrieved from S&P Global.
Note: Company reported GAAP diluted EPS $0.33 and adjusted EPS $0.36 in Q3 2025; actual “Primary EPS” in the S&P dataset aligns with adjusted EPS. Company actuals by quarter: Q1 revenue $268.3M, EPS $0.33; Q2 revenue $275.0M, EPS $0.09; Q3 revenue $314.2M, EPS $0.33 GAAP/$0.36 adjusted .

  • Q3 2025: revenue and EPS beat consensus; Q2 2025: revenue beat, EPS missed; Q1 2025: both revenue and EPS beat (see table).
  • Implication: Street models likely need higher Real Estate contribution assumptions and better Timberlands margin capture; Wood Products remains sensitive to price realization and mix.

Key Takeaways for Investors

  • Real Estate is the swing factor: episodic but powerful; expect lumpiness, yet pipeline and conservation demand support medium-term monetization; near-term Q4 volumes guided lower vs Q3 .
  • Timberlands resilient: seasonal volume and mix drive variability; watch Idaho index-linked sawlog pricing (lagged to Sept–Nov lumber) and southern mills’ inventory balancing in Q4 .
  • Wood Products leverage to pricing: operations are first quartile; any sustained lumber price improvement would quickly flow through given lower unit costs and steady shipments .
  • Merger with Rayonier is a structural catalyst: scale to ~4.2M acres, ~$40M synergies, diversified portfolio (timberlands, wood products, real estate, NCS) — supports multiple expansion over time .
  • NCS optionality growing: solar options expected to reach 40–45k acres by YE; Smackover lithium leases >5k acres; timelines uncertain but strategic value building .
  • Balance sheet/liquidity strong: $388M liquidity; debt refinanced with WACD ~2.3%; dividend maintained; share repurchases paused pre-merger .
  • Near-term setup: Q4 guided lower; traders should watch lumber pricing trends, curtailment announcements, and closing dynamics on Georgia/Chenal real estate transactions as catalysts .