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Rayonier (RYN) Q3 Earnings Top Estimates, Revenues Surge Y/Y

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Rayonier Inc. (RYN - Free Report) came up with third-quarter 2021 pro forma net income per share of 35 cents, beating the Zacks Consensus Estimate of 14 cents. Also, the figure compares favorably with the prior-year quarter’s 6 cents per share.

Results reflect a year-over-year increase in the top line. Revenues surged 83.4% year over year to $364.7 million. In addition, the revenue figure surpassed the Zacks Consensus Estimate of $225.5 million.

According to David Nunes, president and CEO of Rayonier, “We are pleased to report our strongest quarterly Adjusted EBITDA result since our separation into a ‘pureplay’ timberland REIT in 2014.

Moreover, the adjusted EBITDA of $114.6 million soared 70.5% from the prior-year quarter. This was fueled by the solid performance of each of the company’s timber segments as well as an outsized contribution from the Real Estate segment.

Segmental Performance

In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $12.8 million, up from the prior-year quarter’s $5.1 million. Results highlight higher net stumpage prices, lower costs and reduced depletion rates, partially muted by soft volumes.

The Pacific Northwest Timber segment reported pro-forma operating income of $2.1 million against the operating loss of $1.8 million posted in third-quarter 2020. This mainly resulted from the higher net stumpage prices, lower costs and depletion rates, partly offset by bleak non-timber income.

The New Zealand Timber segment recorded pro-forma operating income of $13.3 million, up from the year-earlier quarter’s $10.7 million. Results mirror higher net stumpage prices, favorable foreign-exchange impacts and lower depletion rates, partly muted by reduced carbon credit sales and elevated costs.

The Timber Funds segment reported pro-forma operating income of $41.3 million in the third quarter against the prior-year quarter’s loss of $12.4 million.

Real Estate’s pro-forma operating income was $46.1 million, up from the year-ago period’s $9.5 million. This chiefly resulted from the significant increase in weighted-average prices, partially offset by a 61% reduction in the number of acres sold.

The Trading segment reported a nil pro-forma operating income in the third quarter compared to the prior-year quarter loss of $0.6 million.

Rayonier exited third-quarter 2021 with $419.6 million in cash and cash equivalents (excluding Timber Funds), up from the $80.5 million recorded as of Dec 31, 2020. The total long-term debt was $1.17 billion, down from $1.3 billion as of Dec 31, 2020.

Outlook

Management projects full-year 2021 earnings per share of $1.05-$1.08 cents, pro forma earnings per share of 62-65 and adjusted EBITDA of $320-$330 million. The guidance is based on solid year-to-date results and management’s expectation for the fourth quarter. The Zacks Consensus Estimate for 2021 earnings per share is currently pinned at 51 cents.

Currently, Rayonier carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Rayonier Inc. Price, Consensus and EPS Surprise

Rayonier Inc. Price, Consensus and EPS Surprise

Rayonier Inc. price-consensus-eps-surprise-chart | Rayonier Inc. Quote

We now look forward to the earnings releases of other REITs, including Outfront Media Inc. (OUT - Free Report) , Welltower Inc. (WELL - Free Report) and Federal Realty Investment Trust (FRT - Free Report) , scheduled to be out today.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.