Any American will understand why Rayonier Inc. was deemed an essential business that needs to continue operating during the COVID-19 pandemic.
During the timber and real estate company’s quarterly conference call last week, CEO David Nunes said the forest products sector was designated a “critical infrastructure industry” by the U.S. Department of Homeland Security.
“This designation was important to allow our industry to continue to supply critical items such as tissue paper, cardboard boxes and construction-grade lumber to end users as we manage through this crisis,” Nunes said, according to a transcript of the call posted by the company.
Yes, America needs Rayonier’s timber for use in the production of toilet paper.
However, not every country feels the same way about it.
Rayonier, headquartered in Wildlight in Nassau County, manages about 2.2 million acres of timberland in the U.S. Southeast and Northwest.
But it also has 415,000 acres in New Zealand, where timber production was halted last month.
“The government instituted more stringent lockdown measures across a broader range of businesses, including forestry, beginning in late March,” Nunes said.
“New Zealand ended these lockdown measures effective April 28, and we are currently in the process of restarting our operations there on a phased basis,” he said.
Even before the April lockdown, Rayonier’s business was impacted by the COVID outbreak in China, stopping demand for logs shipped from New Zealand. That caused a big drop in first-quarter profits from the New Zealand operations.
With profits down in its other businesses, Rayonier had a break-even first quarter on an adjusted basis.
Nunes said the company remains in good shape.
“As a pure-play timberland REIT, we enjoy strong margins and substantially less volatility than downstream manufacturing businesses. And we have a geographically diverse portfolio that further mitigates our exposure to any single region or product category,” he said.
Rayonier is adding 141,000 acres of Northwest timber with the acquisition of Poulsbo, Washington-based Pope Resources, which it expects to close May 8.
“Overall, while this has certainly been a tumultuous period, we believe we are managing through it well,” Nunes said.
Supermarkets are, of course, an essential business and have remained busy. So, it should be no surprise that Publix Super Markets Inc. reported a huge jump in first-quarter sales.
The Lakeland-based grocer said last week that total sales rose 16.1% to $11.2 billion in the quarter and comparable-store sales (sales at stores open for more than one year) rose 14.4%.
Publix estimates pandemic-related business increased sales by about $1 billion in the first quarter.
Adjusted earnings in the quarter jumped 28.9% to $956.2 million, or $1.35 per share.
Publix also said the price of its stock increased from $48.90 on March 1 to $50.10 on May 1.
The company’s stock is not publicly traded and is made available only to employees, with the price determined by an independent valuation five times a year.
Global medical device maker Medtronic plc also is providing essential services during the pandemic, including stepping up production of urgently needed ventilators.
However, its Jacksonville division, which produces surgical instruments for ear, nose and throat physicians, is not considered as essential as some other operations.
In an update on how COVID-19 is impacting operations, the Ireland-based company listed all of its products under the categories of “more urgent,” “moderately elective” or “more elective.”
The ENT business fell into the more elective category.
In response to an inquiry on how the pandemic is affecting operations in Jacksonville, a Medtronic spokeswoman did not give specifics on the business but issued a broad statement, saying the impact “remains fluid” as it monitors the situation.
“Medtronic continues to make progress with its pipeline and continues to work with regulatory agencies on timelines,” it said.
“Clinical trials that are currently enrolling patients, however, have generally been placed on temporary pause to allow hospital clinical resources to focus on fighting COVID-19.”
In the company’s business update, Medtronic said it is increasing production of ventilators fivefold to be able to make more than 1,000 per week by the end of June.
Black Knight Inc. on May 5 reported first-quarter earnings that were higher than analysts’ forecasts.
However, the Jacksonville-based mortgage technology company lowered its forecast for the rest of 2019 because of the impact of the pandemic.
Black Knight’s adjusted first-quarter earnings of 47 cents a share were 3 cents higher than the first quarter of 2019 and 2 cents higher than the consensus forecast of analysts surveyed by Zacks Investment Research.
Meanwhile, Black Knight lowered its earnings forecast for the full year from its previous prediction of $1.97 to $2.06 a share to a range of $1.90 to $1.97.
The company said the effects of the pandemic include lower foreclosure-related volumes in its specialty servicing software business, because of foreclosure moratoriums.
Black Knight, which has 2,339 employees in Jacksonville and 4,911 in total, said more than 99% of its employees are working from home.
The St. Joe Co. reported last week a first-quarter loss of $1.5 million, or 3 cents a share.
The real estate development company said shutdowns to its hospitality operations during the pandemic affected results.
St. Joe develops residential communities and commercial properties but also operates two hotels and resort amenities in the Florida Panhandle.
The company, long headquartered in Jacksonville, moved its offices to WaterSound in the Panhandle to be closer to its developments.
In a news release, CEO Jorge Gonzalez said St. Joe’s “fortress-like balance sheet” and diverse revenue streams are helping the company manage the impact of the pandemic.
“Even in times of disruption and uncertainty, not all industries are affected in the same manner nor are their recovery the same,” he said.
“As the hospitality segment continues to be materially impacted by the current shutdown, the residential and commercial segments are proving to be more resilient.”
The pandemic is increasing sales of Maxwell House coffee produced in Jacksonville, as fewer consumers go out to cafes and instead drink coffee made at home.
However, total coffee sales at parent company Kraft Heinz Corp. dropped in the first quarter because of a loss of business in Canada.
Kraft Heinz last week reported $275 million in first-quarter coffee sales, down from $308 million the previous year.
The company blamed the decline on the end of a licensing agreement with McDonald’s Corp. to make McCafe brand coffee.
The license to use the McCafe brand in Canada expired in December. McDonald’s also has a new agreement with Keurig Dr Pepper Inc. to produce McCafe brand products in the U.S., beginning in the second half of 2020.
The company’s plant in Downtown Jacksonville is its last remaining U.S. Maxwell House plant. Speculation has been ongoing for more than a year that Kraft Heinz is trying to sell Maxwell House, but the company has not publicly commented on it.
Many Kraft Heinz brands had been struggling but with more consumers staying home to eat, the company said U.S. sales rose 6.4% to $4.5 billion in the first quarter.
It said retail consumption in all of its businesses rose in March because of the pandemic.