Rayonier Inc.’s RYN third-quarter 2015 pro forma net income per share came in at 17 cents, missing the Zacks Consensus Estimate of 11 cents. In the prior-year quarter, earnings were recorded at 28 cents per share.
Total sales for the quarter were $151.7 million, up 1.3% year over year. Further, the figure surpassed the Zacks Consensus Estimate of $150 million.
Segmental Performance
Pro forma operating income at the company’s Southern Timber segment declined to $10.5 million from $13.5 million recorded in the year-ago quarter.
The Pacific Northwest Timber segment posted pro forma operating income of $3.1 million, down from the year-ago tally of $6.3 million.
New Zealand Timber segment posted pro forma operating loss of $0.9 million compared with pro forma operating income of $1.9 million in third-quarter 2014.
The Real Estate segment posted pro forma operating income of $20.0 million, up from the year-ago tally of $16.4 million.
Pro forma operating at the Trading segment was $0.4 million, down from $2.5 million recorded a year ago.
Lastly, pro-forma operating loss at the Corporate and Other segment declined to $3.8 million from loss of $4.9 million incurred in third-quarter 2014.
Liquidity
Rayonier ended third-quarter 2015 with $65.8 million in cash and cash equivalents, down from $91.6 million recorded at prior-quarter end. Total long-term debt was $791.2 million, up from $621.8 million as of Dec 31, 2014.
Share Repurchase
During third-quarter 2015, Rayonier bought back shares worth around $65.2 million at an average price of $23.65 a share. As of Sep 30, 2015, the company had $24.1 million remaining under its repurchase authorization.
Our Viewpoint
Continuous divestiture of non-strategic timberlands and re-investment in strategic timberlands, and strong pulpwood demand from key markets bode well for Rayonier. 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.
Investors interested in the REIT sector may consider stocks Gramercy Property Trust Inc. GPT, Public Storage PSA and STORE Capital Corp. STOR. All three stocks sport a Zacks Rank #1 (Strong Buy).
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