UDPATE 2-Timber co Plum Creek's fourth-quarter profit drops

* Q4 earnings per share $0.57 cents vs $0.68 cents

* Revenue falls to $461 million from $504 million

* Shares down almost 1 percent after-hours (Updates with CEO quotes, outlook, stock unchanged)

NEW YORK, Feb 2 (Reuters) - Plum Creek Timber Co (PCL.N) said on Monday its fourth-quarter profit fell as income was hit by a decline in residential construction, and weak prices and demand for timber.

But the results beat Wall Street estimates and the company said it expected first-quarter and full-year 2009 earnings to exceed current targets. Plum Creek's stock was down about 1 percent in after-hours trading after closing 19 cents higher on the New York Stock Exchange at $30.96.

President and Chief Executive Officer Rick Holley said the company was holding off harvesting timber while markets were weak, had permanently closed one sawmill and was curtailing others.

In the real estate segment, Plum Creek had removed listings from weak markets such as Florida in favor of attractive markets in other regions such as Mississippi, Holley said.

Net earnings were $95 million, or 57 cents per share, compared with a $118 million, or 68 cents per share in the same quarter of 2007, the Seattle-based company said. Revenue fell to $461 million from $504 million a year earlier.

Analysts, on average, had expected earnings of 46 cents per share and revenue of $481.92 million, according to Reuters Estimates.

"Our operating plans for 2009 take into consideration the difficult market conditions we are likely to face for most of this year, as well as our positive long-term view of timber and rural land markets." said Holley.

He said Plum Creek expected residential construction markets to remain very weak for most of 2009, and expected sawlog customers to remain extremely cautious.

It expects to harvest between 16 million and 17 million tons of timber during 2009, reducing sawlog production in both its northern and southern segments and deferring some harvest due to expected weak pricing.

As a result, the company expects 2009 earnings to be between $1.38 and $1.63 per share and first-quarter earnings in the range 94 cents to 99 cents per share. Analysts currently expect 92 cents for the full year and 9 cents for the first quarter.

(Reporting by Steve James; Editing by Bernard Orr)