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Why Is Rayonier (RYN) Up 13.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Rayonier (RYN - Free Report) . Shares have added about 13.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Rayonier due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Rayonier’s Q3 Earnings Beat Estimates, Revenues Lag
Rayonier reported third-quarter 2022 pro forma net income per share of 15 cents, surpassing the Zacks Consensus Estimate of 10 cents.
Rayonier’s Southern Timber and Pacific Northwest Timber segments displayed solid results. However, weakness in the New Zealand Timber and Real Estate segments was noticed.
Quarterly revenues of $195.3 million lagged the Zacks Consensus Estimate of $228.4 million.
On a year-over-year basis, pro forma net income per share and revenues declined 57.1% and 46.4%, respectively.
According to David Nunes, president and CEO of Rayonier, “We are encouraged by our third quarter results, particularly given the challenges presented by ongoing cost pressures, the recent slowdown in the U.S. housing market, and continued headwinds in China as it relates to our export business.”
Concurrently with its earnings release, RYN announced that it has entered into two separate agreements to acquire around 172,400 acres of high-quality commercial timberlands from Manulife Investment Management, a leading timberland investment manager, for roughly $474 million. The timberlands are located in Texas, Georgia, Alabama and Louisiana.
Segmental Performance
In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $22.5 million, up 75.8% from the prior-year quarter’s $12.8 million. This growth was driven by a rise in net stumpage realizations, higher volumes, higher non-timber income and lower depletion rates, partially offset by increased overhead and other costs.
The Pacific Northwest Timber segment reported a pro-forma operating income of $3.3 million, up from $2.1 million a year ago. The improvement was attributable to higher net stumpage realizations and an increase in non-timber income, partially offset by the write-off of timber basis due to a fire in Washington, lower volumes and increased overhead and other costs.
The New Zealand Timber segment recorded pro-forma operating income of $9.3 million, down from the year-earlier quarter’s $13.3 million. Lower net stumpage realizations, higher costs and a rise in depletion rates were responsible for the fall. However, it was partially offset by increased carbon credit sales, favorable foreign exchange impacts and higher volumes.
Real Estate’s pro-forma operating income was $4.3 million, down from the year-ago period’s $46.1 million. This substantial decline was due to a decrease in the number of acres sold and lower weighted-average prices.
The Trading segment reported $0.2 million pro-forma operating income in the third quarter compared with the breakeven results in the prior-year quarter.
Balance Sheet
Rayonier exited third-quarter 2022 with $260.9 million in cash and cash equivalents (excluding Timber Funds), down from $279.3 million recorded as of Jun 30, 2022.
2022 Guidance
Per management, the company is on track to achieve its prior full-year adjusted EBITDA guidance based on its results so far into 2022 and its expectations for the fourth quarter.
In its second-quarter earnings release, management had projected adjusted EBITDA to be between $310 million and $330 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Rayonier has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Rayonier has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Rayonier belongs to the Zacks Building Products - Wood industry. Another stock from the same industry, UFP Industries (UFPI - Free Report) , has gained 23.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
UFP Industries reported revenues of $2.32 billion in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $2.66 for the same period compares with $1.93 a year ago.
UFP Industries is expected to post earnings of $1.80 per share for the current quarter, representing a year-over-year change of -17.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
UFP Industries has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Rayonier (RYN) Up 13.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Rayonier (RYN - Free Report) . Shares have added about 13.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Rayonier due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Rayonier’s Q3 Earnings Beat Estimates, Revenues Lag
Rayonier reported third-quarter 2022 pro forma net income per share of 15 cents, surpassing the Zacks Consensus Estimate of 10 cents.
Rayonier’s Southern Timber and Pacific Northwest Timber segments displayed solid results. However, weakness in the New Zealand Timber and Real Estate segments was noticed.
Quarterly revenues of $195.3 million lagged the Zacks Consensus Estimate of $228.4 million.
On a year-over-year basis, pro forma net income per share and revenues declined 57.1% and 46.4%, respectively.
According to David Nunes, president and CEO of Rayonier, “We are encouraged by our third quarter results, particularly given the challenges presented by ongoing cost pressures, the recent slowdown in the U.S. housing market, and continued headwinds in China as it relates to our export business.”
Concurrently with its earnings release, RYN announced that it has entered into two separate agreements to acquire around 172,400 acres of high-quality commercial timberlands from Manulife Investment Management, a leading timberland investment manager, for roughly $474 million. The timberlands are located in Texas, Georgia, Alabama and Louisiana.
Segmental Performance
In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $22.5 million, up 75.8% from the prior-year quarter’s $12.8 million. This growth was driven by a rise in net stumpage realizations, higher volumes, higher non-timber income and lower depletion rates, partially offset by increased overhead and other costs.
The Pacific Northwest Timber segment reported a pro-forma operating income of $3.3 million, up from $2.1 million a year ago. The improvement was attributable to higher net stumpage realizations and an increase in non-timber income, partially offset by the write-off of timber basis due to a fire in Washington, lower volumes and increased overhead and other costs.
The New Zealand Timber segment recorded pro-forma operating income of $9.3 million, down from the year-earlier quarter’s $13.3 million. Lower net stumpage realizations, higher costs and a rise in depletion rates were responsible for the fall. However, it was partially offset by increased carbon credit sales, favorable foreign exchange impacts and higher volumes.
Real Estate’s pro-forma operating income was $4.3 million, down from the year-ago period’s $46.1 million. This substantial decline was due to a decrease in the number of acres sold and lower weighted-average prices.
The Trading segment reported $0.2 million pro-forma operating income in the third quarter compared with the breakeven results in the prior-year quarter.
Balance Sheet
Rayonier exited third-quarter 2022 with $260.9 million in cash and cash equivalents (excluding Timber Funds), down from $279.3 million recorded as of Jun 30, 2022.
2022 Guidance
Per management, the company is on track to achieve its prior full-year adjusted EBITDA guidance based on its results so far into 2022 and its expectations for the fourth quarter.
In its second-quarter earnings release, management had projected adjusted EBITDA to be between $310 million and $330 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Rayonier has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Rayonier has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Rayonier belongs to the Zacks Building Products - Wood industry. Another stock from the same industry, UFP Industries (UFPI - Free Report) , has gained 23.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
UFP Industries reported revenues of $2.32 billion in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $2.66 for the same period compares with $1.93 a year ago.
UFP Industries is expected to post earnings of $1.80 per share for the current quarter, representing a year-over-year change of -17.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
UFP Industries has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.