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Rayonier (RYN) Earnings & Revenues Miss Estimates in Q1
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Rayonier Inc. (RYN - Free Report) reported first-quarter 2023 pro-forma net income per share of 1 cent, missing the Zacks Consensus Estimate of 8 cents. The figure declined significantly from the prior-year quarter’s 20 cents. Our estimate for the metric was the same as the Zacks Consensus Estimate.
The quarterly results reflected lower-than-anticipated revenues. The pro-forma operating income declined across all segments.
Quarterly revenues came in at $179.1 million, missing the Zacks Consensus Estimate of $198 million. On a year-over-year basis, revenues fell 19.3%. Our estimate for the metric was $197.3 million.
According to David Nunes, CEO of Rayonier, “Amid weaker end-market demand and continued macroeconomic headwinds, the total Adjusted EBITDA generated by our Timber segments collectively declined 30% relative to an extraordinarily strong first quarter in 2022.”
Segmental Performance
In the first quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $22.2 million, down 26.7% from the prior-year quarter’s $30.3 million. Our estimate for the metric was $20.5 million. The decline was due to a fall in net stumpage realizations, higher depletion rates, and higher lease expenses and other costs, partially offset by higher non-timber income.
The Pacific Northwest Timber segment reported a pro-forma operating loss of $3.5 million against an income of $6.6 million a year ago. Our estimate for the metric was an operating income of $2.7 million. The decline was attributable to lower net stumpage realizations, decreased volumes, higher costs, and a dip in non-timber income, partially offset by lesser depletion rates.
The New Zealand Timber segment recorded pro-forma operating income of $1.6 million, down from the year-earlier quarter’s $5.4 million. This was due to a timber write-off resulting from a tropical cyclone casualty event, lower carbon credit sales, unfavorable foreign exchange impacts, higher costs, and lower volumes. Our estimate for the metric was $7.6 million.
Real Estate’s pro-forma operating income was $0.9 million lower than the year-ago period of $10.2 million. The lower number of acres sold was partially offset by an increase in weighted average prices. Our estimate for the metric was $8.4 million.
The Trading segment reported a $0.3 million pro-forma operating income in the first quarter, less than $0.4 million in the prior-year quarter. A lower sales volume led to a decline. Our estimate for the metric was $0.2 million.
Balance Sheet
Rayonier exited first-quarter 2023 with $98.7 million in cash and cash equivalents, down from $114.3 million as of Dec 31, 2022.
2023 Guidance
For 2023, management expects adjusted EBITDA and pro-forma earnings per share to be at the lower end of the prior guidance of 36-50 cents and $280-$320 million, respectively.
SBA Communications Corporation (SBAC - Free Report) reported first-quarter 2023 adjusted funds from operations (FFO) per share of $3.13, outpacing the Zacks Consensus Estimate of $3.11. Moreover, the figure reflects a rise of 5.7% from the prior-year quarter.
SBAC’s site-leasing revenues improved year over year on healthy leasing activity amid elevated tower space demand. It has continued to benefit from the addition of sites to its portfolio. The company also raised its 2023 outlook.
Digital Realty Trust (DLR - Free Report) reported first-quarter 2023 core FFO per share of $1.66, beating the Zacks Consensus Estimate by a whisker. The figure, however, declined from the year-ago quarter’s $1.67.
DLR experienced year-over-year growth in operating revenues in the quarter. However, rising rental property operating expenses acted as a dampener.
Prologis, Inc. (PLD - Free Report) reported first-quarter 2023 core FFO per share of $1.22, beating the Zacks Consensus Estimate of $1.21. This also compares favorably with the year-ago quarter’s figure of $1.09.
PLD’s results reflected solid demand for industrial real estate, leading to low vacancies and an increase in rents. The industrial REIT raised the mid-point of its 2023 guidance.
Note- Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Rayonier (RYN) Earnings & Revenues Miss Estimates in Q1
Rayonier Inc. (RYN - Free Report) reported first-quarter 2023 pro-forma net income per share of 1 cent, missing the Zacks Consensus Estimate of 8 cents. The figure declined significantly from the prior-year quarter’s 20 cents. Our estimate for the metric was the same as the Zacks Consensus Estimate.
The quarterly results reflected lower-than-anticipated revenues. The pro-forma operating income declined across all segments.
Quarterly revenues came in at $179.1 million, missing the Zacks Consensus Estimate of $198 million. On a year-over-year basis, revenues fell 19.3%. Our estimate for the metric was $197.3 million.
According to David Nunes, CEO of Rayonier, “Amid weaker end-market demand and continued macroeconomic headwinds, the total Adjusted EBITDA generated by our Timber segments collectively declined 30% relative to an extraordinarily strong first quarter in 2022.”
Segmental Performance
In the first quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $22.2 million, down 26.7% from the prior-year quarter’s $30.3 million. Our estimate for the metric was $20.5 million. The decline was due to a fall in net stumpage realizations, higher depletion rates, and higher lease expenses and other costs, partially offset by higher non-timber income.
The Pacific Northwest Timber segment reported a pro-forma operating loss of $3.5 million against an income of $6.6 million a year ago. Our estimate for the metric was an operating income of $2.7 million. The decline was attributable to lower net stumpage realizations, decreased volumes, higher costs, and a dip in non-timber income, partially offset by lesser depletion rates.
The New Zealand Timber segment recorded pro-forma operating income of $1.6 million, down from the year-earlier quarter’s $5.4 million. This was due to a timber write-off resulting from a tropical cyclone casualty event, lower carbon credit sales, unfavorable foreign exchange impacts, higher costs, and lower volumes. Our estimate for the metric was $7.6 million.
Real Estate’s pro-forma operating income was $0.9 million lower than the year-ago period of $10.2 million. The lower number of acres sold was partially offset by an increase in weighted average prices. Our estimate for the metric was $8.4 million.
The Trading segment reported a $0.3 million pro-forma operating income in the first quarter, less than $0.4 million in the prior-year quarter. A lower sales volume led to a decline. Our estimate for the metric was $0.2 million.
Balance Sheet
Rayonier exited first-quarter 2023 with $98.7 million in cash and cash equivalents, down from $114.3 million as of Dec 31, 2022.
2023 Guidance
For 2023, management expects adjusted EBITDA and pro-forma earnings per share to be at the lower end of the prior guidance of 36-50 cents and $280-$320 million, respectively.
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-eps-surprise-chart | Rayonier Inc. Quote
Performance of Other REITs
SBA Communications Corporation (SBAC - Free Report) reported first-quarter 2023 adjusted funds from operations (FFO) per share of $3.13, outpacing the Zacks Consensus Estimate of $3.11. Moreover, the figure reflects a rise of 5.7% from the prior-year quarter.
SBAC’s site-leasing revenues improved year over year on healthy leasing activity amid elevated tower space demand. It has continued to benefit from the addition of sites to its portfolio. The company also raised its 2023 outlook.
Digital Realty Trust (DLR - Free Report) reported first-quarter 2023 core FFO per share of $1.66, beating the Zacks Consensus Estimate by a whisker. The figure, however, declined from the year-ago quarter’s $1.67.
DLR experienced year-over-year growth in operating revenues in the quarter. However, rising rental property operating expenses acted as a dampener.
Prologis, Inc. (PLD - Free Report) reported first-quarter 2023 core FFO per share of $1.22, beating the Zacks Consensus Estimate of $1.21. This also compares favorably with the year-ago quarter’s figure of $1.09.
PLD’s results reflected solid demand for industrial real estate, leading to low vacancies and an increase in rents. The industrial REIT raised the mid-point of its 2023 guidance.
Note- Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.