Rayonier Posts Lower 3Q Profit on Weak Timber Market
Oct. 22, 2008 - Rayonier today reported third quarter income from continuing operations of $40 million, or 50 cents per share, compared to $70 million, or 89 cents per share, in third quarter 2007. Year-to-date income from continuing operations was $118 million, or $1.48 per share, compared to $138 million, or $1.75 per share, in the first nine months of 2007. Year-to-date 2007 included a special item charge of $10 million, or 13 cents per share, for timber damaged by forest fires.
Third quarter net income was $30 million, or 37 cents per share compared to $71 million, or 90 cents per share, in 2007. Year-to-date net income was $108 million, or $1.36 per share compared to $140 million, or $1.77 per share, in 2007. For the three and nine months ended September 30, 2008, net income included a discontinued operations loss of $10 million, or 13 cents per share, primarily due to one-time tax charges related to the planned sale of our New Zealand holdings. For the comparable 2007 periods, income from discontinued operations was $1 million and $2 million, respectively.
Lee M. Thomas, chairman, president and CEO said, “Given the challenging economic conditions, we continued to perform well and generated strong cash flows. We are still experiencing high demand for our Performance Fibers products and non-strategic timberlands, which has partially mitigated the softness in our timber business resulting from the weak housing market.”
“Our strong balance sheet and diverse mix of businesses enable us to continue generating strong cash flow during these uncertain economic times,” said Thomas. “With low debt levels and no near-term maturities, we have significant operating flexibility. Additionally, our Performance Fibers business has long-term contracts extending into 2011 covering nearly all of our high-value cellulose specialties production.”
“Given the continued weak outlook for sawtimber, we expect full year 2008 earnings to be below the prior year period. In Performance Fibers, results are expected to improve with strong demand for our cellulose specialty products more than offsetting escalating raw material, energy and transportation costs," said Thomas. “In Real Estate, we anticipate continued interest for our non-strategic timberlands. Overall, cash available for distribution in 2008 is anticipated to be well above dividend requirements.”