Rayonier (RYN) Misses Q3 EPS by 4c, Revenues Miss

Rayonier (NYSE: RYN) reported Q3 EPS of $0.00, $0.04 worse than the analyst estimate of $0.04. Revenue for the quarter came in at $156.4 million versus the consensus estimate of $179.79 million.

• Third quarter net loss attributable to Rayonier of ($0.4) million ($0.00 per share) on revenues of $156.4 million
• Third quarter operating income of $11.0 million and Adjusted EBITDA of $43.2 million
• Year-to-date cash provided by operations of $164.2 million and cash available for distribution (CAD) of $115.6 million
• Third quarter share repurchases of $8.4 million

“Our overall results were down considerably from the prior year quarter, primarily as a result of a significantly lower contribution from our Real Estate segment due to the timing of transactions, as well as challenging end-market conditions in our timber segments,” said David Nunes, President and CEO. “In Southern Timber, weighted-average stumpage prices decreased 7%, while harvest volumes decreased 4% versus the prior year period. However, non-timber income generated sales of $8.3 million, representing an increase of $3.4 million versus the prior year period. In Pacific Northwest Timber, weak export markets coupled with challenging lumber market conditions continued to negatively impact results, as harvest volumes decreased 16% and delivered sawtimber prices decreased 24% versus the prior year period. New Zealand Timber results also declined due to weaker demand from China and competition from alternative supply sources, which resulted in a 17% decline in export sawtimber prices versus the prior year period. As expected, Real Estate results in the third quarter were well below the prior year quarter, as the prior year quarter included a significant Non-strategic / Timberland sale.”

Outlook

“Based on challenging export and domestic market conditions across our timber segments, we expect to achieve full-year Adjusted EBITDA toward the lower end of our prior guidance,” stated Nunes. “In our Southern Timber segment, we now expect full-year harvest volumes of 6.0 to 6.1 million tons as we have pulled back harvest volumes in certain markets impacted by the decline in sawtimber demand, although we anticipate continued solid pulpwood demand in our key market areas. In our Pacific Northwest Timber segment, we are on track to achieve full-year harvest volumes of approximately 1.2 million tons, as we anticipate a modest improvement in domestic demand and pricing. In our New Zealand Timber segment, full-year harvest volumes are expected to remain between 2.7 and 2.8 million tons. Pricing in New Zealand has improved modestly from mid-year lows, but still remains well below average pricing in the first half of the year. In our Real Estate segment, following a relatively light third quarter, we expect a strong fourth quarter contribution based on a number of transactions that are either under contract or in active negotiation.”

For earnings history and earnings-related data on Rayonier (RYN) click here.

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