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Rayonier (RYN) Up 7.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Rayonier (RYN - Free Report) . Shares have added about 7.4% 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 its most recent earnings report in order to get a better handle on the important drivers.
Rayonier Q3 Earnings Beat Estimates, Revenues Lag
Rayonier reported third-quarter 2023 pro-forma net income per share of 13 cents, beating the Zacks Consensus Estimate by a penny. However, the figure declined 13.3% from the prior-year quarter’s 15 cents.
Rayonier’s New Zealand Timber and Real Estate segments displayed solid results. However, weakness in the Southern Timber and Pacific Northwest Timber segments marred its performance partly.
Quarterly revenues came in at $201.6 million, which missed the Zacks Consensus Estimate of $208.7 million. On a year-over-year basis, revenues rose 3.2%.
According to David Nunes, CEO of Rayonier, “We generated strong third-quarter results, particularly in light of the macroeconomic challenges that continue to adversely impact our timber businesses. Adjusted EBITDA improved 22% versus the prior year quarter, primarily driven by a stronger contribution from our Real Estate segment and increased carbon credit sales in our New Zealand Timber segment. Total Adjusted EBITDA for our collective timber segments increased 7% versus the prior year period, as favorable results in our Southern Timber and New Zealand Timber segments more than offset lower Adjusted EBITDA in our Pacific Northwest Timber segment.”
Segmental Performance
In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $18.6 million, which decreased 17.3% from the prior-year quarter’s $22.5 million. Our estimate for the metric was $12.8 million. The decline was due to a fall in net stumpage realizations, higher depletion rates, and higher overhead and other costs, partially offset by higher volumes and higher non-timber income.
The Pacific Northwest Timber segment incurred a pro-forma operating loss of $0.6 million against an income of $3.3 million a year ago. Our estimate for the metric was the same as the reported number. The decline was attributable to lower net stumpage realizations, decreased volumes, higher costs and lower timber income, partially offset by lesser depletion rates.
The New Zealand Timber segment recorded pro-forma operating income of $17.6 million, up from the year-earlier quarter’s $9.3 million. This was due to high carbon credit sales, partially offset by lower volumes and lower net stumpage realizations.
Real Estate’s pro-forma operating income was $9.2 million, higher than the year-ago period of $4.3 million. The higher number of acres sold and the increase in weighted average prices led to the rise.
The Trading segment reported a $0.1 million pro-forma operating loss in the third quarter against an income of $0.2 million in the prior-year quarter. Our estimate for the metric was $0.2 million.
Balance Sheet
Rayonier exited the third quarter of 2023 with $107.8 million in cash and cash equivalents, down from $114.3 million as of Dec 31, 2022.
2023 Guidance
For 2023, Rayonier expects adjusted EBITDA to be at the higher end of the prior guidance of $275-$300 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 17.39% due to these changes.
VGM Scores
At this time, Rayonier has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Rayonier has a Zacks Rank #3 (Hold). We expect an in-line 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 11.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
UFP Industries reported revenues of $1.83 billion in the last reported quarter, representing a year-over-year change of -21.3%. EPS of $2.10 for the same period compares with $2.66 a year ago.
UFP Industries is expected to post earnings of $1.68 per share for the current quarter, representing a year-over-year change of -20%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.3%.
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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Rayonier (RYN) Up 7.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Rayonier (RYN - Free Report) . Shares have added about 7.4% 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 its most recent earnings report in order to get a better handle on the important drivers.
Rayonier Q3 Earnings Beat Estimates, Revenues Lag
Rayonier reported third-quarter 2023 pro-forma net income per share of 13 cents, beating the Zacks Consensus Estimate by a penny. However, the figure declined 13.3% from the prior-year quarter’s 15 cents.
Rayonier’s New Zealand Timber and Real Estate segments displayed solid results. However, weakness in the Southern Timber and Pacific Northwest Timber segments marred its performance partly.
Quarterly revenues came in at $201.6 million, which missed the Zacks Consensus Estimate of $208.7 million. On a year-over-year basis, revenues rose 3.2%.
According to David Nunes, CEO of Rayonier, “We generated strong third-quarter results, particularly in light of the macroeconomic challenges that continue to adversely impact our timber businesses. Adjusted EBITDA improved 22% versus the prior year quarter, primarily driven by a stronger contribution from our Real Estate segment and increased carbon credit sales in our New Zealand Timber segment. Total Adjusted EBITDA for our collective timber segments increased 7% versus the prior year period, as favorable results in our Southern Timber and New Zealand Timber segments more than offset lower Adjusted EBITDA in our Pacific Northwest Timber segment.”
Segmental Performance
In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $18.6 million, which decreased 17.3% from the prior-year quarter’s $22.5 million. Our estimate for the metric was $12.8 million. The decline was due to a fall in net stumpage realizations, higher depletion rates, and higher overhead and other costs, partially offset by higher volumes and higher non-timber income.
The Pacific Northwest Timber segment incurred a pro-forma operating loss of $0.6 million against an income of $3.3 million a year ago. Our estimate for the metric was the same as the reported number. The decline was attributable to lower net stumpage realizations, decreased volumes, higher costs and lower timber income, partially offset by lesser depletion rates.
The New Zealand Timber segment recorded pro-forma operating income of $17.6 million, up from the year-earlier quarter’s $9.3 million. This was due to high carbon credit sales, partially offset by lower volumes and lower net stumpage realizations.
Real Estate’s pro-forma operating income was $9.2 million, higher than the year-ago period of $4.3 million. The higher number of acres sold and the increase in weighted average prices led to the rise.
The Trading segment reported a $0.1 million pro-forma operating loss in the third quarter against an income of $0.2 million in the prior-year quarter. Our estimate for the metric was $0.2 million.
Balance Sheet
Rayonier exited the third quarter of 2023 with $107.8 million in cash and cash equivalents, down from $114.3 million as of Dec 31, 2022.
2023 Guidance
For 2023, Rayonier expects adjusted EBITDA to be at the higher end of the prior guidance of $275-$300 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 17.39% due to these changes.
VGM Scores
At this time, Rayonier has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Rayonier has a Zacks Rank #3 (Hold). We expect an in-line 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 11.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
UFP Industries reported revenues of $1.83 billion in the last reported quarter, representing a year-over-year change of -21.3%. EPS of $2.10 for the same period compares with $2.66 a year ago.
UFP Industries is expected to post earnings of $1.68 per share for the current quarter, representing a year-over-year change of -20%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.3%.
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.