A month has gone by since the last earnings report for Rayonier (
RYN Quick Quote RYN - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Rayonier due for a breakout? 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 catalysts.
Rayonier’s Earnings & Revenues Beat Estimates in Q4
Rayonier reported fourth-quarter 2022 pro forma net income per share of 11 cents, surpassing the Zacks Consensus Estimate by a penny. The figure rose significantly from the prior-year quarter’s 1 cent.
The quarterly results reflected better-than-anticipated revenues. The pro forma operating income improved across all segments. The company issued 2023 outlook. The pro forma revenues and quarterly revenues came in at $214.9 million and $245.4 million, respectively, outpacing the Zacks Consensus Estimate of $208.2 million. On a year-over-year basis, while revenues fell 6.3%, pro forma revenues climbed 12.5%. According to David Nunes, president and CEO of Rayonier, “We are pleased with our overall financial performance for the full-year 2022. The total Adjusted EBITDA generated by our three Timber segments of $275.4 million represented the highest-ever result for the company—roughly 8% above the previous record achieved in 2021.” In 2022, RYN reported pro forma net income per share of 62 cents, down from 67 cents in the prior year. However, the figure beat the Zacks Consensus Estimate of 61 cents. Pro forma revenues of $878.6 million improved 1.8% year over year from $863.1 million while revenues declined 18.1% to $909.1 million. Nonetheless, the figure surpassed the Zacks Consensus Estimate of $871.8 million. Segmental Performance
In the fourth quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $19.7 million, up 3.7% from the prior-year quarter’s $19 million. This growth was driven by a rise in net stumpage realizations, lower leased land reforestation and other costs, and higher non-timber income, partially offset by lower volumes and higher depletion rates.
The Pacific Northwest Timber segment reported a pro-forma operating income of $3.1 million, up from $1.5 million a year ago. The improvement was attributable to the sale of a timber reservation to a conservation group, higher net stumpage realizations, lower indirect costs, a favorable adjustment to a timber write-off taken in the third quarter and higher volumes, partially offset by lower non-timber income and higher depletion rates. The New Zealand Timber segment recorded pro-forma operating income of $8 million, up from the year-earlier quarter’s $3.6 million. The rise was driven by higher carbon credit sales and higher volumes, partially offset by lower net stumpage realizations, unfavorable foreign exchange impacts and increased costs. Real Estate’s pro-forma operating income was $4.9 million against the year-ago period’s loss of $0.3 million. Higher number of acres sold and an increase in weighted average prices, driven by a heavier mix of Improved Development activity, aided the rise. The Trading segment reported $0.3 million pro-forma operating income in the fourth quarter against a loss of $0.5 million in the prior-year quarter. Improved margins more than offset reduced trading volume, which drove the increase. Balance Sheet
Rayonier exited fourth-quarter 2022 with $114.3 million of cash and cash equivalents (excluding Timber Funds), down from $260.9 million recorded as of Sep 30, 2022.
For 2023, management expects earnings per share to lie in the range of 36-50 cents.
The adjusted EBITDA is anticipated to be between $280 million and $320 million. How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -43.33% due to these changes.
Currently, Rayonier has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Rayonier has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.