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Deltic Reports Drop in 1Q Net Income

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Deltic Timber Corp. on Monday announced net income of $400,000, or 3 cents per share, in the first quarter of 2016 compared with $1.9 million, or 15 cents per share, for the first quarter of 2015.

The income came on $50.6 million in net sales in first-quarter 2016 compared with $48.4 million in first-quarter 2015.

The company, based in El Dorado, blamed the decline on weak markets for wood products, a drop in oil and gas-related income and higher costs for harvesting timber and interest payments on loans for capital projects and share repurchases.

However, a decrease in Deltic’s effective income tax rate for the first quarter partially offset the decline. The tax decrease was a result of the TREE Act, which reduces the top tax rate for C corporations, like Deltic, on capital gains from the sale of timber that has been held for more than 15 years.

“While the weak markets for wood products that existed in 2015 continued throughout the first quarter of 2016, Deltic’s operations generated positive financial results for the period,” Deltic CEO Ray Dillon said in a statement.

“In the Woodlands segment, pine stumpage prices increased, as area sawmills paid more for the logs they needed for their operations, while oil and gas-related income continued to decrease due to low natural gas prices,” he said.

In addition, the operating performance at the company’s Del-Tin Fiber improved, and Deltic sold more lots than it did in the first quarter of 2015, Dillon said.

Deltic’s woodlands segment generated operating income of $5.3 million for the first quarter of 2016 compared with $6.5 million for the same period of 2015. The company harvested 205,608 tons of pine sawtimber during the first quarter of 2016, an 11 percent decrease from the 231,534 tons harvested in first-quarter 2015. The average per-ton sales price for pine sawtimber in first-quarter 2016 was $28, an 8 percent increase from $26 per ton during the first quarter of 2015.

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