It has been about a month since the last earnings report for Rayonier (RYN Quick QuoteRYN - Free Report) . Shares have lost about 1.7% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important drivers.

Rayonier’s Earnings and Revenues Surpass Estimates in Q2

Rayonier reported second-quarter 2022 pro forma net income per share of 16 cents, surpassing the Zacks Consensus Estimate by a cent.

Quarterly revenues of $246.3 million exceeded the Zacks Consensus Estimate of $224.0 million.

Rayonier’s Southern Timber and Pacific Northwest Timber segments displayed solid results. However, weakness in the New Zealand Timber, Real Estate and Trading segments was noticed.

Moreover, on a year-over-year basis, FFO and revenues declined 27.3% and 15.5%, respectively.

According to David Nunes, president and CEO of Rayonier, “We are pleased with our second quarter results, particularly given the challenges presented by rising costs across our segments as well as continued COVID-related disruptions in our export business.”  

Segmental Performance

In the second quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $24.1 million, up 41.8% from the prior-year quarter’s $17.0 million. This growth was driven by a rise in net stumpage realizations, higher non-timber income and escalation in volumes, partially offset by increased overhead costs and higher depletion rates.

The Pacific Northwest Timber segment reported pro-forma operating income of $2.9 million, up from $1.9 million a year ago. The improvement was attributable to higher net stumpage realizations, partially offset by increased overhead and other costs, lower volumes and a decline in non-timber income.

The New Zealand Timber segment recorded pro-forma operating income of $8.0 million, down from the year-earlier quarter’s $20.7 million. Lower net stumpage realizations, higher costs and a rise in depletion rates were responsible for the fall. However, it was partially offset by increased carbon credit sales, favorable foreign exchange impacts and higher volumes.

Real Estate’s pro-forma operating income was $11 million, down from the year-ago period’s $20.2 million. This decline was due to a decrease in the number of acres sold, partially offset by an increase in weighted-average prices.

The Trading segment reported a loss of $0.4 million pro-forma operating income in the second quarter compared with the prior-year quarter’s gain of $0.4 million. The loss was attributable to lower sales volumes and price during the quarter.

Balance Sheet

Rayonier exited second-quarter 2022 with $279.3 million in cash and cash equivalents (excluding Timber Funds), up from $256.5 million recorded as of Mar 31, 2022.

2022 Guidance

For full-year 2022, Rayonier expects EPS to lie in the range of 57-63 cents.

Management projects adjusted EBITDA to be between $310 million and $330 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -10.35% due to these changes.

VGM Scores

At this time, Rayonier has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 D. 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 this revision indicates a downward shift. Notably, Rayonier has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.