"Our earnings and cash flow were seasonally strong, although our planned harvest was constrained somewhat by wet weather in the South," said Michael Covey. "Our Resource, Wood Products and Real Estate businesses all continue to perform well. It is an opportune time to add over 200,000 acres of high quality timberlands to our southern portfolio given our continued belief that incremental lumber production will come from the U.S. South as housing starts continue to improve over the long term," concluded Mr. Covey.
Resource segment's operating income was $34.1 million on revenues of $91.9 million in the 3Q, compared to operating income of $10.8 million on revenues of $39.5 million in the 2Q 2014. Harvest volumes were seasonally higher in the Northern region. Operations were constrained seasonally in the second quarter due to spring breakup in the North. Wet weather affected operations in the South in the second and third quarters. Sawlog price realizations increased 6% in the Northern region. Sawlog prices increased 16% in the Southern region due primarily to a higher mix of hardwood sawlogs and strong hardwood sawlog prices. Southern pine sawlog price realizations were up slightly due to a higher mix of plywood logs.
Wood Products segment's operating income was $15.8 million on revenues of $99.2 million in the 3Q, compared to operating income of $14.9 million on revenues of $100.6 million in the 2Q 2014. Slightly higher average lumber prices realized in the 3Q more than offset a 2% decline in lumber shipments.
Potlatch is a Real Estate Investment Trust (REIT) with approximately 1.4 million acres of timberland in Arkansas, Idaho and Minnesota. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary.