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Rayonier (RYN) Misses on Q1 Earnings & Revenues, Trims View

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Rayonier Inc. (RYN - Free Report) reported first-quarter 2020 net income attributable to the company of $25.9 million or 20 cents per share. This included an income from a Large Disposition sale of $28.7 million, which was partially offset by the costs related to the merger with Pope Resources. The company had earned $24.8 million or 19 cents per share in the year ago quarter.

The pro forma net loss came in at $0.3 million or $0.00 per share. This missed the Zacks Consensus Estimate of earnings of 3 cents per share.

The company’s quarterly performance reflects a declining operating income in Southern Timber and New Zealand Timber.

Revenues were down 25.3% year over year to $143.1 million on a pro forma basis and missed the Zacks Consensus Estimate of $165.6 million.

The coronavirus pandemic and the ensuing uncertain situation has resulted in the company revising its full-year outlook.

Segmental Performance

During the first quarter, operating income at the company’s Southern Timber segment came in at $15.1 million, down from the prior-year quarter’s $21.5 million. This downside resulted from lower non-timber income, net-stumpage prices and volumes. However, the negatives were partially offset by a drop in lease related expenses and lower depletion rates.

The Pacific Northwest Timber segment reported an operating loss of $0.9 million, narrower than the operating loss of $3.7 million posted in first-quarter 2019. This was mainly due to higher net stumpage prices, non-timber income and reduced depletion rates, partially offset by an increase in overhead costs and other variable costs.

The New Zealand Timber segment recorded operating income of $5.4 million, down from the year-earlier number of $15.7 million. Results indicate lower net stumpage prices, volumes, non- timber income, higher overhead costs and roading costs, partly negated by lower depreciation and software amortization expenses, and favorable foreign-exchange impact.

Real Estate’s operating income of $26.8 million was significantly up from the year-ago tally of $10 million. This chiefly resulted from a large disposition sale of $116 million in Mississippi, comprising an area of 66,946 acres at an average price of $1,733 per acre.

The Trading segment reported break-even results in the quarter against an operating income of $0.5 million recorded in the year-ago quarter. This is mainly due to lower volumes and prices prevailing due to the coronavirus pandemic hurting major export markets.

Liquidity

Rayonier ended the first quarter with $132.4 million in cash and cash equivalents, up from $68.7 million recorded as of Dec 31, 2019. Total long-term debt was $1.1 billion, up 8.4% from $973.1 million as on Dec 31, 2019.

During the reported quarter, the company also repurchased 3.2 million common shares at an average price of $20.71 per share. As of March 31, 2020, the company had 129.2 million common shares outstanding and $87.7 million remaining on its current share-repurchase authorization.

Outlook

Rayonier has revised its full-year outlook in light of the coronavirus pandemic. The company now projects 2020 net income attributable to Rayonier of $33-$46 million and adjusted EBITDA of $200-$230 million. The company had earlier estimated 2020 net income attributable to Rayonier of $47-$57 million and adjusted EBITDA of $245-$270 million.

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, Omega Healthcare Investors, Inc. (OHI - Free Report) , Vornado Realty Trust (VNO - Free Report) andRealty Income Corporation (O - Free Report) . All three companies are scheduled to release quarterly numbers on May 4.

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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