Rayonier's (RYN) Net Income & Revenues Lag Q4 Estimates

Rayonier Inc. (NYSE:RYN) reported fourth-quarter 2018 pro-forma net income per share of 2 cents, missing the Zacks Consensus Estimate of 3 cents. Moreover, the reported figure comes in lower than the prior-year figure of 20 cents.

The bottom line was impacted by a decline in operating income of the company’s New Zealand Timber, Real Estate and Trading segments.

Total sales for the quarter came in at $166.1 million, plunging nearly 31% year over year. Nonetheless, it handily outpaced the Zacks Consensus Estimate of $163.5 million.

The company reported 2018 pro-forma net income per share of 79 cents, missing the Zacks Consensus Estimate by a whisker. Yet, the tally improved 21.5% year over year. Also, revenues for full-year 2018 came in at $816.1 million, surpassing the Zacks Consensus Estimate of $813.5 million. It indicates a marginal decline from the year-ago figure of $819.6 million.

Segmental Performance

During the reported quarter, operating income in the company’s Southern (NYSE:SO) Timber segment was $7.2 million, flat compared with the year-ago tally.

The Pacific Northwest Timber posted operating loss of $4.1 million compared to $2.4 million of operating income recorded in fourth-quarter 2017.

The New Zealand Timber reported operating income of $12.6 million, down from the prior-year tally of $16.1 million.

Real Estate’s operating income was $4.6 million, lower than the year-ago figure of $58.8 million.

The Trading segment’s operating income was $0.3 million, down from the year-earlier figure of $1.2 million.

Lastly, the Corporate and Other segment posted operating loss of $5.6 million, flat compared with the year-ago tally.

Liquidity

Rayonier ended the fourth quarter with $148.4 million in cash and cash equivalents, up from $112.7 million recorded as of Dec 31, 2017. Total long-term debt was $972.6 million, down from $1.02 billion as on Dec 31, 2017.

2019 Outlook

The company expects net income of $60-$69 million in 2019, while earnings per share is anticipated to be in the band of 46-53 cents. The Zacks Consensus Estimate for 2019 earnings per share is pegged at 64 cents.

Conclusion

The company delivered modest performance across its segments. Results were impacted by lower harvest volumes, higher average costs and unfavorable foreign-exchange movements.

Nonetheless, we expect robust demand for rural higher and better uses (HBU) properties to drive near-term revenues, while a disciplined acquisition strategy will ensure inorganic growth over the long term.

Rayonier Inc. Price, Consensus and EPS Surprise

Currently, Rayonier carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Duke Realty Corporation’s (NYSE:DRE) fourth-quarter 2018 core funds from operations (FFO) per share of 35 cents came in line with the Zacks Consensus Estimate. Moreover, the figure came in a penny ahead of the prior-year figure of 30 cents.

Alexandria Real Estate Equities, Inc. (NYSE:ARE) reported fourth-quarter 2018 adjusted FFO of $1.68 per share, missing the Zacks Consensus Estimate by a whisker.

Boston Properties Inc.’s (NYSE:BXP) fourth-quarter 2018 FFO per share of $1.59 also missed the Zacks Consensus Estimate of $1.68. The figure, however, came in 7% higher than the prior-year tally.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>