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Dec 31, 2019
Rayonier AM Q4 2019 Earnings Report
Rayonier AM experienced a loss due to weak commodity pricing but took actions to improve margins and reduce costs.
Key Takeaways
Rayonier Advanced Materials reported a loss from continuing operations of $57 million, or $0.91 loss per diluted common share, compared to income from continuing operations of $7 million, or $0.07 earnings per diluted common share for the prior year. The adjusted loss from continuing operations was $49 million, or $0.78 loss per diluted common share, compared to adjusted income from continuing operations of $7 million, or $0.08 earnings per diluted common share for the prior year comparable quarter.
Loss from continuing operations was $57 million due primarily to weak commodity pricing.
Implemented strategy to increase margins for Cellulose Specialties.
Reduced capital expenditures and debt.
Initiating actions to evaluate alternatives for non-core assets and additional cost reductions.
Revenue by Segment
Forward Guidance
The Company expects cost savings and cash preservation plan of $60 to $70 million for 2020.
Positive Outlook
- Cellulose Specialties prices are expected to increase approximately 2 percent.
- Lumber demand is rebounding due to increased housing starts and remodeling activity.
- Paperboard margins should improve as raw material costs for pulp have declined.
- High-yield pulp prices appear to have reached the bottom in the fourth quarter of 2019.
- Newsprint sales volumes are expected to increase due to improved productivity.
Challenges Ahead
- Cellulose Specialties volumes are expected to decline due to a ramp down in certain contractual volumes.
- Pricing for commodity products are currently at decades lows.
- Duties on lumber sales from Canada into the U.S. will continue to impact financial results.
- Newsprint prices remain challenged due to demand weakness.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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