Rayonier's (RYN) Q2 Earnings & Revenues Beat Estimates

Rayonier Inc.’s (NYSE:RYN) second-quarter 2016 pro forma net income per share came in at 7 cents, beating the Zacks Consensus Estimate of 3 cents. The second-quarter 2015 pro forma net income per share figure was $0.00.

Total sales for the quarter were $261.6 million, up significantly year over year. Further, the figure surpassed the Zacks Consensus Estimate of $112 million.

Segmental Performance

Pro forma operating income at the company’s Southern Timber segment declined to $11.1 million from $11.8 million recorded a year ago.

The Pacific Northwest Timber posted pro forma operating income of $1.1 million, down from $1.7 million in second-quarter 2015.

New Zealand Timber posted pro forma operating income of $10 million. Pro forma operating loss for second-quarter 2015 was $0.9 million.

Real Estate posted pro forma operating income of $4.4 million, up from the year-ago tally of $1.4 million.

Pro forma operating income at the Trading segment was $0.6 million. Pro forma operating loss for second-quarter 2015 was $0.1 million.

Lastly, pro-forma operating loss at the Corporate and Other segment rose to $6.3 million from a loss of $5.9 million incurred in second-quarter 2015.

Liquidity

Rayonier ended second-quarter 2016 with $129.7 million in cash and cash equivalents, up from $51.8 million recorded at the end of fourth-quarter 2015. Total long-term debt was $1.05 billion, up from $830.6 million as of Dec 31, 2015.

Our Viewpoint

Continuous divestiture of non-strategic timberlands as well as re-investment in strategic timberlands, and strong pulpwood demand from key markets bode well for Rayonier over the long term. On the other hand, tough compliance requirements, cut-throat competition with national and local players and foreign exchange fluctuations keep us concerned about this Zacks Rank #3 (Hold) stock.

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