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Why Is Rayonier (RYN) Up 10.5% Since Its Last Earnings Report?

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A month has gone by since the last earnings report for Rayonier Inc. (RYN - Free Report) . Shares have added about 10.5% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is RYN due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Rayonier’s Q4 Earnings and Revenues Top Estimates

Rayonier reported fourth-quarter 2017 pro forma net income per share of 20 cents, comfortably beating the Zacks Consensus Estimate of 9 cents. Further, the bottom line came in significantly above the prior-year quarter figure of 5 cents.

For full-year 2017, the company reported pro forma net income per share of 65 cents, beating the Zacks Consensus Estimate of 55 cents. Also, the bottom line for 2017 surpassed the prior-year’s tally of 56 cents.

Total sales for the fourth quarter of $239.7 million, up 4.5% year over year, outpaced the Zacks Consensus Estimate of $165.6 million.

Total sales for 2017 were $819.6 million; marginally up from the year-ago figure of $815.9 million. Further, the figure handily surpassed the Zacks Consensus Estimate for 2017 of $724.7 million.

Results reflect solid performance of Pacific Northwest, New Zealand Timber and the Real Estate segments, on account of higher harvest volumes and increase in sawtimber prices. However, performance in the Corporate segment was disappointing.

Segmental Performance

During the reported quarter, pro forma operating income at the company’s Southern Timber segment declined to $7.2 million from $8.1 million recorded a year ago.

The Pacific Northwest Timber posted pro forma operating income of $2.4 million against operating loss of $3.1 million incurred in fourth-quarter 2016.

New Zealand Timber reported pro forma operating income of $16.1 million, significantly up from the prior-year quarter figure of $11.7 million.

Real Estate’s pro forma operating income was $20.0 million, substantially higher than the year-ago figure of $6.8 million.

Trading segment’s pro forma operating income was $1.2 million, up from the year-ago figure of $0.5 million.

Lastly, pro forma operating loss at the Corporate and Other segment was $5.6 million, compared with a loss of $5.1 million incurred in fourth-quarter 2016.

Liquidity

Rayonier ended the quarter with $112.7 million in cash and cash equivalents, up from $85.9 million recorded at the end of fourth-quarter 2016. Total long-term debt was $1.02 billion; marginally down from the year-ago figure of 1.03 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter.

Rayonier Inc. Price and Consensus

 

Rayonier Inc. Price and Consensus | Rayonier Inc. Quote

VGM Scores

At this time, RYN has a great Growth Score of A, though it is lagging a bit on the momentum front with a B. The stock was als allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise RYN has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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