Rayonier Returns to Profit as Merger Lifts Revenue
Revenue reached $396.5 million as the PotlatchDeltic combination expanded the timberland owner’s operations.
Rayonier Inc. (RYN), a timberland and wood-products company, returned to a quarterly profit as contributions from the PotlatchDeltic combination lifted results across its businesses. Net income attributable to Rayonier was $19.1 million, or $0.06 a diluted share, compared with a first-quarter loss of $12.4 million, or $0.05 a share.
The quarter marked an operating rebound after merger costs and other expenses weighed on the first three months of the year. Operating income recovered to $34.6 million from a $45.7 million first-quarter loss, while pro forma operating income increased sequentially to $47.2 million from $25.9 million.
Revenue rose to $396.5 million from $276.8 million in the first quarter and $106.5 million a year earlier, with the latest period including a full quarter of legacy PotlatchDeltic operations. Pro forma earnings increased to $0.10 a share from $0.07 in the first quarter and $0.06 a year earlier. The prior-year GAAP result included a $404.4 million gain from discontinued operations.
Adjusted earnings before interest, taxes, depreciation and amortization increased to $123.7 million from $44.9 million a year earlier. Southern Timber sales more than doubled to $107.6 million as harvest volume rose 110%, primarily from legacy PotlatchDeltic acreage. Lower pine sawtimber and pulpwood prices, along with higher depletion and costs, contributed to a decline in the segment’s operating income even as adjusted EBITDA rose 85%.
Northwest Timber sales nearly tripled to $66 million, helped by incremental legacy PotlatchDeltic volume and higher-priced timber from Idaho and other acquired operations. Segment adjusted EBITDA reached $26.3 million from $6.8 million a year earlier. Wood Products, added in the merger, generated $196.2 million of sales and $25 million of adjusted EBITDA as average lumber realization reached its highest level in nearly four years.
Real Estate sales increased to $53.7 million from $29.4 million a year earlier as acres sold more than doubled, offsetting a lower average price per acre. Adjusted EBITDA of $38.3 million exceeded the high end of Rayonier’s prior quarterly guidance, though it moderated from $46.2 million in the first quarter.
Rayonier reiterated its 2026 outlook for Southern Timber harvest volume of 12.2 million to 12.5 million tons, Wood Products shipments of about 1.1 billion board feet and Real Estate adjusted EBITDA of $180 million to $200 million. For the third quarter, the company expects Wood Products shipments of 320 million to 330 million board feet and Real Estate adjusted EBITDA of $25 million to $35 million.
The company repurchased $72.4 million of shares during the quarter, up from $31.1 million in the first quarter, leaving $126 million under its authorization. The faster pace followed an increase in year-to-date operating cash flow to $145.2 million from $88.7 million.