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Rayonier's (RYN) Q4 Earnings and Revenues Top Estimates

Zacks Equity Research

Rayonier Inc. RYN reported fourth-quarter 2017 pro forma net income per share of 20 cents, comfortably beating the Zacks Consensus Estimate of 9 cents. Further, the bottom line came in significantly above the prior-year quarter figure of 5 cents.

For full-year 2017, the company reported pro forma net income per share of 65 cents, beating the Zacks Consensus Estimate of 55 cents. Also, the bottom line for 2017 surpassed the prior-year’s tally of 56 cents.

Total sales for the fourth quarter of $239.7 million, up 4.5% year over year, outpaced the  Zacks Consensus Estimate of $165.6 million.

Total sales for 2017 were $819.6 million; marginally up from the year-ago figure of $815.9 million. Further, the figure handily surpassed the Zacks Consensus Estimate for 2017 of $724.7 million.

Results reflect solid performance of Pacific Northwest, New Zealand Timber and the Real Estate segments on account of higher harvest volumes and increase in sawtimber prices. However, performance in the Corporate segment was disappointing.

Segmental Performance

During the reported quarter, pro forma operating income at the company’s Southern Timber segment rose to $7.2 million from $8.1 million recorded a year ago.

The Pacific Northwest Timber posted pro forma operating income of $2.4 million against operating loss of $3.1 million incurred in fourth-quarter 2016.

New Zealand Timber reported pro forma operating income of $16.1 million, significantly up from the prior-year quarter figure of $11.7 million.

Real Estate’s pro forma operating income was $20.0 million, substantially higher than the year-ago figure of $6.8 million.

Trading segment’s pro forma operating income was $1.2 million, up from the year-ago figure of $0.5 million.

Lastly, pro forma operating loss at the Corporate and Other segment was $5.6 million compared with a loss of $5.1 million incurred in fourth-quarter 2016.

Liquidity

Rayonier ended the quarter with $112.7 million in cash and cash equivalents, up from $85.9 million recorded at the end of fourth-quarter 2016. Total long-term debt was $1.02 billion; marginally down from the year-ago figure of 1.03 billion.

Our Viewpoint

Rayonier owns or leases around 2.6 million acres of timberlands in some of the most productive timber-growing regions. These timberlands are strategically located near the pulpwood consuming mills. Recent developments in the field of biogenetics and consistent cash flow bode well for Rayonier over the long run.

However, the company faces competition from its substitutes and other market players in the timberland sector. Rayonier has to comply with strict regulatory requirements that are subject to frequent changes. This adversely affects its business.

Rayonier Inc. Price, Consensus and EPS Surprise

Rayonier Inc. Price, Consensus and EPS Surprise | Rayonier Inc. Quote

Rayonier carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of HCP Inc. HCP, CubeSmart CUBE and EPR Properties EPR. HCP and CubeSmart are scheduled to release results on Feb 13 and Feb 15 respectively, while EPR Properties is slated to report its numbers on Feb 28.

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