Potlatch sales of timberland on track

Potlatch Corp. remains on track to sell about 20,000 acres of timberlands this year, cashing in on demand for wooded cabin sites and land for recreational use, officials said Thursday.

The sale of 7,500 acres during the second quarter generated about $7.4 million in income for the Spokane-based company. Overall, Potlatch reported $34 million in net income during the quarter ending June 30, compared to $2.4 million in net income during the same period in 2006.

Since converting to a real estate investment trust — or REIT — last year, Potlatch’s focus has been on “growing our timber and our land business,” Mike Covey, the company’s chairman and chief executive officer, told analysts during a conference call.

Earlier this year, the company established a real estate division. Potlatch owns 1.5 million acres of forestland in Idaho, Arkansas and the upper Midwest, and plans to sell off about 250,000 to 300,000 acres over the next decade.

The company’s manufacturing operations also had strong second-quarter performances.

Near-record prices for cedar boards helped Potlatch’s wood products division post a profit, softening the impact of weak prices for commodity lumber used in home construction. Cedar accounts for less than 20 percent of the trees grown on the firm’s Idaho forestland, but it’s a high value product from the company’s sawmills in St. Maries and Lewiston, Covey said.

In addition, pulp prices are at 12 year highs, bolstering the bottom line for the company’s pulp and paperboard division.

In other news, Potlatch paid out $1.4 million during the second quarter in retroactive pay associated with a new contract for its Lewiston workers.

The company’s stock closed at $42.13 per share Thursday, an increase of 58 cents per share.