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Higher Lumber Prices Continue To Boost Deltic Timber Profit

2 min read

Deltic Timber Corp. of El Dorado on Wednesday announced third-quarter net income of $1.5 million, or 12 cents per share, up from $100,000 for the third quarter of 2015.

The company (NYSE: DEL) had $53.5 million in net sales in the third quarter compared with $50.1 million for the same quarter last year.

Deltic said credited its manufacturing segment for the improvements, noting that average lumber prices have gone up by 17 percent compared with a year earlier while operating costs had been contained.

The manufacturing segment reported operating income of $5.7 million for the quarter compared to $2 million for the same period last year.

D. Mark Leland, who was named interim CEO upon the unexpected retirement of Ray Dillon earlier this month, said in a news release, “Deltic delivered another solid quarter of operating and financial results driven by its exceptional asset base and people. We continued to capitalize on an improved lumber market while maintaining our market share,” he said.

A new, small-log line at its Ola Mill is set to be operational by December, “allowing us to optimize smallwood harvested in our plantation thinning operations,”  he said.

Deltic’s real estate segment reported an operating loss of $200,000 for the third quarter, just as it did in the same quarter of 2015, although the means for getting there was different. Only 25 residential lots were sold in recent quarter, down from 34 for a year earlier. But the average lot price was $70,000, up from $62,700 last year.

The company also expects to close by the end of the year on the sale of 45 lots in Chenal Valley that it developed in 2016.

Leland also said, “We harvested more pine sawtimber during the third quarter and are on track to achieving our annual harvest plan in the woodlands segment.”

The woodlands segment generated operating income of $4.1 million for the third quarter compared with $4.5 million for the same period in 2015.

The company harvested 188,643 tons of pine sawtimber during the quarter, a 5 percent increase from the 179,376 tons harvested in third quarter of 2015.

The average per-ton sales price for pine sawtimber was $28 for the third quarter of 2016, a 4 percent increase from third quarter of 2015, when the price was $27.

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