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Rayonier (RYN) Q2 Earnings and Revenues Miss Estimates
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Shares of Rayonier Inc. (RYN - Free Report) are down more than 3% so far in today’s trading session on the NYSE following its yesterday’s announcement of a lower-than-expected performance in the second quarter.
Rayonier reported second-quarter 2024 pro-forma net income per share of 2 cents, down from 5 cents reported in the year-ago quarter. This also missed the Zacks Consensus Estimate of 14 cents.
Results reflect lower harvest volumes in its Timber segments amid the choppiness in the market.
Total revenues came in at $173.6 million, which lagged the Zacks Consensus Estimate of $224.9 million. On a year-over-year basis, the figure decreased 16.9%. Adjusted EBITDA came in at $55.7 million, down from $69.2 million in the prior-year period.
According to Mark McHugh, president and CEO of Rayonier, “Market conditions remained challenging during the second quarter, translating to a 20% decline in Adjusted EBITDA versus the prior year quarter.” The CEO also noted that “Much of this decline was attributable to lower harvest volumes in our Timber segments, reflecting generally softer demand and the deferral of some harvest activity.”
Segmental Performance
In the second quarter, the pro-forma operating income in the company’s Southern Timber segment came in at $17.1 million, which decreased 21.2% from the prior-year quarter. The decrease was due to lower volumes and higher costs, partially offset by lower depletion rates and higher net stumpage realizations. The Pacific Northwest Timber segment reported a pro-forma operating loss of $1.5 million compared with a loss of $2.4 million a year ago. This was driven by improved net stumpage realizations and lower depletion rates, partly offset by lower non-timber income, higher costs and lower volumes.
The New Zealand Timber segment recorded pro-forma operating income of $2.9 million, up from the year-earlier quarter’s $2.4 million. This rise was due to higher carbon credit income, favorable foreign exchange impacts, lower costs and lower depletion rates, partially offset by lower net stumpage realizations and lower volumes. Real Estate’s pro-forma operating income was $5.8 million against the year-ago period’s income of $8.6 million. This reflects lower weighted-average prices, partially offset by significantly higher acres sold and favorable deferred revenue adjustments.
The Trading segment reported a pro-forma operating income of $0.1 million, the same as in the prior-year quarter.
Balance Sheet
Rayonier exited the second quarter of 2024 with $141.9 million in cash and cash equivalents, down from $159.9 million as of Mar 31, 2024.
Outlook
Rayonier expects full-year 2024 adjusted EBITDA to be toward the lower end of the prior guidance range and full-year pro forma EPS to be modestly below the low end of the previous guidance. This is based on the company’s first-half results and expectations for the remainder of the year.
At the beginning of the year, the company disclosed that for 2024, it expects net income attributable to Rayonier in the band of $60-$80 million, EPS in the range of 40-54 cents and adjusted EBITDA in the band of $290-$325 million. The Zacks Consensus Estimate for 2024 EPS is currently pegged at 44 cents.
The full-year 2024 guidance excludes the potential impact of any additional asset sales as part of the $1 billion disposition target that the company announced in November 2023.
Currently, Rayonier carries a Zacks Rank #4 (Sell).
Public Storage (PSA - Free Report) reported a second-quarter 2024 core funds from operations per share of $4.23, which surpassed the Zacks Consensus Estimate of $4.20. However, the figure declined 1.2% year over year. Quarterly revenues of $1.17 billion increased 4.8% year over year but narrowly missed the Zacks Consensus Estimate of $1.18 billion.
Public Storage experienced lower realized annual rent per occupied square foot and a decline in occupancy, as well as a rise in property tax expenses and interest expenses, in the quarter. Management noted that customer move-in rents were impacted by industry-wide competition and adjusted PSA’s outlook for 2024 to reflect market move-in rent dynamics. Presently, PSA carries a Zacks Rank #3 (Hold).
UDR Inc. (UDR - Free Report) reported second-quarter 2024 funds from operations as adjusted (FFOA) per share of 62 cents, which surpassed the Zacks Consensus Estimate of 61 cents. On a year-over-year basis, FFOA per share climbed 1.6%.
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Rayonier (RYN) Q2 Earnings and Revenues Miss Estimates
Shares of Rayonier Inc. (RYN - Free Report) are down more than 3% so far in today’s trading session on the NYSE following its yesterday’s announcement of a lower-than-expected performance in the second quarter.
Rayonier reported second-quarter 2024 pro-forma net income per share of 2 cents, down from 5 cents reported in the year-ago quarter. This also missed the Zacks Consensus Estimate of 14 cents.
Results reflect lower harvest volumes in its Timber segments amid the choppiness in the market.
Total revenues came in at $173.6 million, which lagged the Zacks Consensus Estimate of $224.9 million. On a year-over-year basis, the figure decreased 16.9%. Adjusted EBITDA came in at $55.7 million, down from $69.2 million in the prior-year period.
According to Mark McHugh, president and CEO of Rayonier, “Market conditions remained challenging during the second quarter, translating to a 20% decline in Adjusted EBITDA versus the prior year quarter.” The CEO also noted that “Much of this decline was attributable to lower harvest volumes in our Timber segments, reflecting generally softer demand and the deferral of some harvest activity.”
Segmental Performance
In the second quarter, the pro-forma operating income in the company’s Southern Timber segment came in at $17.1 million, which decreased 21.2% from the prior-year quarter. The decrease was due to lower volumes and higher costs, partially offset by lower depletion rates and higher net stumpage realizations.
The Pacific Northwest Timber segment reported a pro-forma operating loss of $1.5 million compared with a loss of $2.4 million a year ago. This was driven by improved net stumpage realizations and lower depletion rates, partly offset by lower non-timber income, higher costs and lower volumes.
The New Zealand Timber segment recorded pro-forma operating income of $2.9 million, up from the year-earlier quarter’s $2.4 million. This rise was due to higher carbon credit income, favorable foreign exchange impacts, lower costs and lower depletion rates, partially offset by lower net stumpage realizations and lower volumes.
Real Estate’s pro-forma operating income was $5.8 million against the year-ago period’s income of $8.6 million. This reflects lower weighted-average prices, partially offset by significantly higher acres sold and favorable deferred revenue adjustments.
The Trading segment reported a pro-forma operating income of $0.1 million, the same as in the prior-year quarter.
Balance Sheet
Rayonier exited the second quarter of 2024 with $141.9 million in cash and cash equivalents, down from $159.9 million as of Mar 31, 2024.
Outlook
Rayonier expects full-year 2024 adjusted EBITDA to be toward the lower end of the prior guidance range and full-year pro forma EPS to be modestly below the low end of the previous guidance. This is based on the company’s first-half results and expectations for the remainder of the year.
At the beginning of the year, the company disclosed that for 2024, it expects net income attributable to Rayonier in the band of $60-$80 million, EPS in the range of 40-54 cents and adjusted EBITDA in the band of $290-$325 million. The Zacks Consensus Estimate for 2024 EPS is currently pegged at 44 cents.
The full-year 2024 guidance excludes the potential impact of any additional asset sales as part of the $1 billion disposition target that the company announced in November 2023.
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
Performance of Other REITs
Public Storage (PSA - Free Report) reported a second-quarter 2024 core funds from operations per share of $4.23, which surpassed the Zacks Consensus Estimate of $4.20. However, the figure declined 1.2% year over year. Quarterly revenues of $1.17 billion increased 4.8% year over year but narrowly missed the Zacks Consensus Estimate of $1.18 billion.
Public Storage experienced lower realized annual rent per occupied square foot and a decline in occupancy, as well as a rise in property tax expenses and interest expenses, in the quarter. Management noted that customer move-in rents were impacted by industry-wide competition and adjusted PSA’s outlook for 2024 to reflect market move-in rent dynamics. Presently, PSA carries a Zacks Rank #3 (Hold).
UDR Inc. (UDR - Free Report) reported second-quarter 2024 funds from operations as adjusted (FFOA) per share of 62 cents, which surpassed the Zacks Consensus Estimate of 61 cents. On a year-over-year basis, FFOA per share climbed 1.6%.
Results reflected an increase in revenues from same-store communities. UDR also raised its full-year 2024 guidance. Currently, UDR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.