Rayonier Inc. REIT's (RYN) third-quarter earnings fell 22%
absent a prior-year tax credit as the forest-products company
reported improved demand, with results beating analysts'
expectations.
Its timber business has seen growth in recent quarters, easing
its reliance on its largest business, performance fibers, which
makes cellulose fibers used in products from liquid-crystal-display
screens to impact-resistant plastics and pharmaceuticals.
Meanwhile, the company stands to benefit from the Internal
Revenue Service's clarification this month that both the the
alternative fuel mixture credit and the cellulosic biofuel producer
credit can be claimed in the same year for different volumes of
"black liquor," a molasseslike substance that's left over from
milling wood chips.
Rayonier said Tuesday it has applied for cellulosic biofuel
producer registration, which if approved by the IRS, would increase
fourth-quarter earnings by about 28 cents a share.
The real estate investment trust reported a third-quarter profit
of $62.9 million, or 77 cents a share, down from $81.1 million, or
$1.01 a share, a year earlier, which included a 61-cent tax
benefit.
Revenue increased to $377.5 million from $300.6 million.
Analysts polled by Thomson Reuters most recently forecast
earnings of 58 cents a share on revenue of $351 million.
Gross margin jumped to 28.7% from 22.9%.
Shares of Rayonier, which sees 2010 earnings at the upper end of
its prior forecast, recently rose 0.9% to $52.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com