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Rayonier's (RYN) Q3 Earnings Beat Estimates, Revenues Lag
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Rayonier Inc. (RYN - Free Report) reported third-quarter 2022 pro forma net income per share of 15 cents, surpassing the Zacks Consensus Estimate of 10 cents.
Rayonier’s Southern Timber and Pacific Northwest Timber segments displayed solid results. However, weakness in the New Zealand Timber and Real Estate segments was noticed.
Quarterly revenues of $195.3 million lagged the Zacks Consensus Estimate of $228.4 million.
On a year-over-year basis, pro forma net income per share and revenues declined 57.1% and 46.4%, respectively.
According to David Nunes, president and CEO of Rayonier, “We are encouraged by our third quarter results, particularly given the challenges presented by ongoing cost pressures, the recent slowdown in the U.S. housing market, and continued headwinds in China as it relates to our export business.”
Concurrently with its earnings release, RYN announced that it has entered into two separate agreements to acquire around 172,400 acres of high-quality commercial timberlands from Manulife Investment Management, a leading timberland investment manager, for roughly $474 million. The timberlands are located in Texas, Georgia, Alabama and Louisiana.
Segmental Performance
In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $22.5 million, up 75.8% from the prior-year quarter’s $12.8 million. This growth was driven by a rise in net stumpage realizations, higher volumes, higher non-timber income and lower depletion rates, partially offset by increased overhead and other costs.
The Pacific Northwest Timber segment reported a pro-forma operating income of $3.3 million, up from $2.1 million a year ago. The improvement was attributable to higher net stumpage realizations and an increase in non-timber income, partially offset by the write-off of timber basis due to a fire in Washington, lower volumes and increased overhead and other costs.
The New Zealand Timber segment recorded pro-forma operating income of $9.3 million, down from the year-earlier quarter’s $13.3 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 $4.3 million, down from the year-ago period’s $46.1 million. This substantial decline was due to a decrease in the number of acres sold and lower weighted-average prices.
The Trading segment reported $0.2 million pro-forma operating income in the third quarter compared with the breakeven results in the prior-year quarter.
Balance Sheet
Rayonier exited third-quarter 2022 with $260.9 million in cash and cash equivalents (excluding Timber Funds), down from $279.3 million recorded as of Jun 30, 2022.
2022 Guidance
Per management, the company is on track to achieve its prior full-year adjusted EBITDA guidance based on its results so far into 2022 and its expectations for the fourth quarter.
In its second-quarter earnings release, management had projected adjusted EBITDA to be between $310 million and $330 million.
Extra Space Storage Inc. (EXR - Free Report) reported third-quarter 2022 core FFO per share of $2.21, beating the Zacks Consensus Estimate of $2.18. The figure was also 19.5% higher than the prior-year quarter’s $1.85.
EXR’s results reflect better-than-anticipated top-line growth. The same-store net operating income (NOI), too, improved year over year. It revises its outlook for 2022.
Public Storage's (PSA - Free Report) third-quarter 2022 core FFO per share of $4.13 surpassed the Zacks Consensus Estimate of $4.05. The figure also increased 20.8% year over year.
PSA’s results reflect better-than-anticipated top-line growth alongside an improvement in the realized annual rent per occupied square foot. The company also benefited from its expansion efforts through acquisitions, developments and extensions. It raised its guidance for 2022 FFO per share.
Healthpeak Properties, Inc. reported third-quarter 2022 FFO as adjusted per share of 43 cents, in line with the Zacks Consensus Estimate. The reported figure was up 7.5% from the year-ago quarter’s 40 cents.
PEAK’s performance was backed by healthy top-line growth. Moreover, improvement in same-store portfolio cash (adjusted) NOI was witnessed across the portfolio. The company revised its 2022 outlook.
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Rayonier's (RYN) Q3 Earnings Beat Estimates, Revenues Lag
Rayonier Inc. (RYN - Free Report) reported third-quarter 2022 pro forma net income per share of 15 cents, surpassing the Zacks Consensus Estimate of 10 cents.
Rayonier’s Southern Timber and Pacific Northwest Timber segments displayed solid results. However, weakness in the New Zealand Timber and Real Estate segments was noticed.
Quarterly revenues of $195.3 million lagged the Zacks Consensus Estimate of $228.4 million.
On a year-over-year basis, pro forma net income per share and revenues declined 57.1% and 46.4%, respectively.
According to David Nunes, president and CEO of Rayonier, “We are encouraged by our third quarter results, particularly given the challenges presented by ongoing cost pressures, the recent slowdown in the U.S. housing market, and continued headwinds in China as it relates to our export business.”
Concurrently with its earnings release, RYN announced that it has entered into two separate agreements to acquire around 172,400 acres of high-quality commercial timberlands from Manulife Investment Management, a leading timberland investment manager, for roughly $474 million. The timberlands are located in Texas, Georgia, Alabama and Louisiana.
Segmental Performance
In the third quarter, the pro-forma operating income at the company’s Southern Timber segment came in at $22.5 million, up 75.8% from the prior-year quarter’s $12.8 million. This growth was driven by a rise in net stumpage realizations, higher volumes, higher non-timber income and lower depletion rates, partially offset by increased overhead and other costs.
The Pacific Northwest Timber segment reported a pro-forma operating income of $3.3 million, up from $2.1 million a year ago. The improvement was attributable to higher net stumpage realizations and an increase in non-timber income, partially offset by the write-off of timber basis due to a fire in Washington, lower volumes and increased overhead and other costs.
The New Zealand Timber segment recorded pro-forma operating income of $9.3 million, down from the year-earlier quarter’s $13.3 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 $4.3 million, down from the year-ago period’s $46.1 million. This substantial decline was due to a decrease in the number of acres sold and lower weighted-average prices.
The Trading segment reported $0.2 million pro-forma operating income in the third quarter compared with the breakeven results in the prior-year quarter.
Balance Sheet
Rayonier exited third-quarter 2022 with $260.9 million in cash and cash equivalents (excluding Timber Funds), down from $279.3 million recorded as of Jun 30, 2022.
2022 Guidance
Per management, the company is on track to achieve its prior full-year adjusted EBITDA guidance based on its results so far into 2022 and its expectations for the fourth quarter.
In its second-quarter earnings release, management had projected adjusted EBITDA to be between $310 million and $330 million.
Currently, Rayonier carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Rayonier Inc. Price, Consensus and EPS Surprise
Rayonier Inc. price-consensus-eps-surprise-chart | Rayonier Inc. Quote
Performance of Other REITs
Extra Space Storage Inc. (EXR - Free Report) reported third-quarter 2022 core FFO per share of $2.21, beating the Zacks Consensus Estimate of $2.18. The figure was also 19.5% higher than the prior-year quarter’s $1.85.
EXR’s results reflect better-than-anticipated top-line growth. The same-store net operating income (NOI), too, improved year over year. It revises its outlook for 2022.
Public Storage's (PSA - Free Report) third-quarter 2022 core FFO per share of $4.13 surpassed the Zacks Consensus Estimate of $4.05. The figure also increased 20.8% year over year.
PSA’s results reflect better-than-anticipated top-line growth alongside an improvement in the realized annual rent per occupied square foot. The company also benefited from its expansion efforts through acquisitions, developments and extensions. It raised its guidance for 2022 FFO per share.
Healthpeak Properties, Inc. reported third-quarter 2022 FFO as adjusted per share of 43 cents, in line with the Zacks Consensus Estimate. The reported figure was up 7.5% from the year-ago quarter’s 40 cents.
PEAK’s performance was backed by healthy top-line growth. Moreover, improvement in same-store portfolio cash (adjusted) NOI was witnessed across the portfolio. The company revised its 2022 outlook.