Timber real estate investment trusts (REIT) -
Plum Creek Timber Company Inc.
) - is set to report its fourth-quarter 2013 results on Jan 27,
after the closing bell. In the last quarter, it delivered a
positive earnings surprise of 4.76%. Let's see how things are
shaping up for this announcement.
Factors to Consider
Plum Creek, which owns the largest and most geographically
diversified private timberland in the U.S, experienced an average
earnings surprise of 26.21% in the last four quarters. However,
the fourth-quarter scenario does not seem to be in favor of the
company due to the decline in timber industry fundamentals.
The softening of prices of logs due to oversupply, especially
in the Southeast region, is a matter of concern for the company.
Additionally, Plum Creek has earlier anticipated the seasonally
lower sales volumes for its manufactured products to lead to low
manufacturing segment's profitability in fourth-quarter 2013.
Moreover, Plum Creek has been suffering a low harvest volume
in Northern and Southern Resources segments since the past few
quarters. This might limit any robust top-line expansion going
Our proven model does not conclusively show that Plum Creek is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
The Expected Surprise Prediction or ESP for Plum Creek is -7.14%
since the Most Accurate estimate stands at 26 cents per share,
while the Zacks Consensus Estimate is higher at 28 cents.
Zacks Rank #4 (Sell):
Plum Creek's Zacks Rank #4 when combined with a negative ESP
makes surprise prediction difficult. We caution against stocks
with Zacks Rank #4 and #5 (Sell rated stocks) going into the
Other Stocks to Consider
Some better performing REIT stocks that have both a positive
earnings ESP and a favorable Zacks Rank are:
), with an Earnings ESP of + 1.98% and a Zacks Rank #2 (Buy). The
company is scheduled to report its fourth-quarter 2013 results on
Feb 20, after the market closes.
), with an Earnings ESP of + 0.94% and a Zacks Rank #2. The
company will report its fourth-quarter 2013 results on Feb 14,
before the opening bell.
), with an Earnings ESP of +3.45% and a Zacks Rank #3 (Hold). The
company is slated to report its fourth-quarter 2013 results on
Feb 12, after the closing bell.
DDR CORP (DDR): Free Stock Analysis Report
PLUM CREEK TMBR (PCL): Free Stock Analysis
PUBLIC STORAGE (PSA): Free Stock Analysis
VENTAS INC (VTR): Free Stock Analysis Report
To read this article on Zacks.com click here.