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Rayonier (RYN) Beats Q4 Earnings Estimates on Revenue Growth

Rayonier Inc. RYN recorded fourth-quarter 2020 pro forma net income per share of 8 cents, surpassing the Zacks Consensus Estimate of 5 cents. However, the figure compares unfavorably with 12 cents per share reported in the year-ago period.

Pro forma net income excludes costs related to the merger with Pope Resources of $0.7 million incurred during the fourth quarter.

Results reflect a year-over-year increase in sales. However, cost of sales and interest expenses flared up, thereby, straining the bottom line.

Pro-forma revenues were up around 10% year over year to $196.30 million. In addition, the revenue figure outpaced the Zacks Consensus Estimate of $183 million.

For 2020, the company reported pro forma net income per share of 25 cents, down 46% from 46 cents in the prior year but outpaced the Zacks Consensus Estimate of 23 cents. Pro forma revenues of $720.4 million improved 1.2% year over year.

Segmental Performance

During the fourth quarter, pro forma operating income at the company’s Southern Timber segment was $9.9 million, down from the prior-year quarter’s $12 million. The downside resulted from lower non-timber income and volumes. However, these negatives were partially offset by higher net stumpage prices and lower depletion rates.

The Pacific Northwest Timber segment reported pro forma operating loss of $0.5 million, improving from the operating loss of $1.3 million posted in fourth-quarter 2019. This was mainly due to higher net stumpage prices and non-timber income, muted by higher depletion rates, and overhead costs.

The New Zealand Timber segment recorded pro forma operating income of $8.8 million, down from the year-earlier number of $9.4 million. Results indicate higher volumes, increased net stumpage prices and lower costs, partly negated by lower carbon credit sales and unfavorable foreign-exchange impact.

The Timber Funds segment reported pro forma operating income of $0.3 million in the fourth quarter.

Real Estate’s pro forma operating income of $10.9 million was down from the year-ago figure of $12.7 million. This chiefly resulted from a decrease in weighted-average prices.

The Corporate and Other segment reported pro forma operating loss of $7 million in fourth-quarter 2020. The segment registered pro forma operating loss of $6.5 million in fourth-quarter 2019.

Rayonier ended 2020 with $80.5 million in cash and cash equivalents, up from $68.7 million recorded as of Dec 31, 2019. However, total long-term debt was $1.3 billion, up from $973.1 million as of Dec 31, 2019.

Outlook

Rayonier expects 2021 earnings to be buoyed by increased contributions from its timber segments. However, it projects lower contribution from the Real Estate segment. Further, the company expects full-year Adjusted EBITDA of $285-$315 million.

Currently, Rayonier carries a Zacks Rank #4 (Sell).

Rayonier Inc. Price, Consensus and EPS Surprise

 

Rayonier Inc. price-consensus-eps-surprise-chart | Rayonier Inc. Quote

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 other REITs like Welltower Inc. WELL, Highwoods Properties HIW and Healthpeak Properties PEAK. All three companies are slated to report fourth-quarter earnings on Feb 9.

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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