RYN Rayonier Inc

The St. Joe Company (JOE), a publicly held real estate company, reported a net income of $14.1 million or 15 cents per share in the first quarter of 2011 compared with a net loss of $11.4 million or 13 cents in the year-earlier quarter. The superior results were primarily due to a pre-tax gain of $50.3 million or 36 cents per share net of tax from the sale of a 40,975 acre timber deed.

For the first quarter of 2011, total revenues stood at $73.4 million compared to $13.3 million in the year-ago quarter. Total revenues for the reported quarter were well ahead of the Zacks Consensus Estimate of $19 million.

During the reported quarter, St. Joe sold 22 homesites at an average price of $95,000, generating $2.2 million in revenues. The company also sold 1.2 acres in Bay County for $226,000 in the commercial business segment.

St. Joe sold 98 acres of rural land during the quarter for $2.8 million. In addition, the company sold standing timber on approximately 40,975 acres to an investment fund. St. Joe received proceeds of $55.9 million for the conveyance of the standing timber but retained ownership of the underlying land. Forestry revenues during the reported quarter were $8.1 million, primarily due to the sale of 295,000 tons of sawtimber and pulpwood.

The company has decided to delay construction of its new corporate headquarters building in Venture Crossings Enterprise Centre at West Bay – a commercial development spanning 1,000 acres adjacent to the new Northwest Florida Beaches International Airport, for an infinite time period. St. Joe intends to reallocate the capital to advance infrastructure construction supporting revenue generating industrial, warehouse and office developments within the project, which will likely have a positive economic impact on the region in the long run.

Capital expenditures for first quarter 2011 were $4.5 million, compared with $1.6 million in the year-earlier period. In addition, St. Joe incurred a cash overhead cost of $16.7 million for the reported quarter compared to $12.4 million in the prior-year period.

At quarter-end, St. Joe had $216.2 million of cash and $24.8 million of pledged securities. Total debt outstanding was $53.9 million. In addition, the company had $125 million available under its revolving credit facilities.

St. Joe currently retains a Zacks #1 Rank, which translates into a short-term ‘Strong Buy’ rating. We maintain our long-term ‘Neutral’ recommendation on the stock. However, one of its competitors Rayonier Inc. (RYN) presently has an ‘Outperform’ recommendation and a Zacks #1 Rank.

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