Yahoo Finance Why Is Rayonier (RYN) Down 0.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Rayonier (RYN). Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Rayonier due for a breakout? 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 Earnings & Revenues Miss Estimates in Q1
Rayonier 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.
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%.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -7.69% due to these changes.
VGM Scores
Currently, Rayonier has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Rayonier has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Rayonier Inc. (RYN) : Free Stock Analysis Report
