Rayonier Advanced Materials Inc. has been consistently disappointing shareholders since it split up with Rayonier Inc. two years ago, but a much stronger than expected first-quarter earnings report brought a dose of good cheer last week.
Rayonier AM’s stock jumped $3.54 to $13.73 Tuesday, a 34.7 percent increase that was by far the biggest gain on the New York Stock Exchange that day.
The adjusted earnings of 36 cents a share were not only higher than the 2015 first-quarter earnings of 25 cents, but they were well above analysts’ forecasts that ranged from 5 cents to 25 cents, according to Thomson Financial.
“We got a solid first quarter and we made a lot of progress on our two key strategic initiatives: first, reducing cost, which is part of our broader transformation initiative, and second, driving innovation. These initiatives will enhance our long-term competitive position,” CEO Paul Boynton said in the company’s conference call with analysts.
Sales fell 2 percent to $218 million, as the market for Jacksonville-based Rayonier AM’s cellulose specialties products continues to be weak.
However, he said the company is expecting to cut expenses by $40 million this year.
“Additionally, lower raw material input and transportation costs provided a moderate tailwind to our quarter,” he said.
Because of that, Rayonier AM raised its forecast for earnings before interest, taxes, depreciation and amortization this year by $10 million to $185 million to $200 million.
“Overall, it looks like the company is continuing to make significant progress on its transformation initiative, and if the cost controls demonstrated are sustainable (as we have modeled), the company should be able to offset a larger portion of the headwinds from the general cellulose specialties market than we had previously expected,” D.A. Davidson analyst Steven Chercover said in a research note.
“While shares of Rayonier AM surged on their first-quarter earnings report, there is still significant upside to our $17.50 price target, and we reiterate our ‘buy’ rating,” he said.
Rayonier Inc. consolidating offices
Rayonier Inc. last week reported earnings that exceeded expectations and also said it will be consolidating its three Northeast Florida offices, including two in Downtown Jacksonville, into one location in the company’s new Nassau County development project.
The real estate and timber company moved its headquarters into the One Enterprise Center building Downtown at 225 Water St. when it split up with Rayonier AM two years ago.
In the company’s conference call to discuss earnings, CEO David Nunes said Rayonier has about 145 employees working at its two Jacksonville offices and one in Fernandina Beach.
Its three leases expire in 2017 and the company will move into a 55,000-square-foot building under construction at Rayonier’s Wildlight development near the intersection of Interstate 95 and Florida A1A.
Rayonier wanted to consolidate into a single office and the company determined constructing its own building, rather than leasing, will save more than $500,000 a year, Nunes said.
“In addition, this move will create benefits associated with reduced travel time between locations and greater productivity. We also believe that having the company’s management and our operational personnel together in one office will promote more efficient communication and decision-making, as well as contribute to a stronger organizational culture,” he said.
“We’re excited about this move and excited about our office serving as a cornerstone for the Wildlight development project,” Nunes said.
Rayonier reported first-quarter adjusted earnings of 11 cents a share, 3 cents lower than last year but 3 cents higher than the average analysts’ forecast, according to Thomson.
FIS also beats forecasts
Fidelity National Information Services Inc., or FIS, also reported higher-than-expected earnings, sending its stock up Tuesday.
Jacksonville-based FIS, which provides technology services for financial companies, reported adjusted earnings of 79 cents a share, up from 65 cents last year and 4 cents higher than the average analysts’ forecast, according to Thomson.
That sent the stock up $4.11 to $71.29 Tuesday.
“We delivered strong and profitable growth,” CEO Gary Norcross said in FIS’ conference call.
“We have a solid pipeline and our sales teams are doing a nice job of converting opportunities to new wins and cross-selling and upselling to existing clients. Market and client demand for our solutions continues with an emphasis on creating operational efficiencies and implementing transformational solutions. These results and trends underscore our confidence in achieving our full-year 2016 plan,” he said.
Norcross also said the integration of SunGard Data Services Inc., which FIS acquired last year, is moving ahead of schedule.
Goldman Sachs added FIS to its “conviction buy” list of top stocks after the earnings report.
“We expect the stock’s multiple to expand if FIS delivers upside to 2016 guidance — and we were encouraged by solid performance and management’s commentary in the first quarter,” Goldman Sachs analyst James Schneider said in a research note.
Drone Aviation again names new CEO
For the second time in less than a year, Drone Aviation Holding Corp. named a new CEO.
Jay Nussbaum, who invested in Drone Aviation nearly a year ago and became chairman of the board, was appointed CEO, the company said last week.
He succeeds Kevin Hess, who had been appointed CEO in October. Hess is remaining with the company as chief technology officer.
Jacksonville-based Drone Aviation produces lighter-than-air aerostats and electric-powered drones.
“In the short time I have been involved with this company, I have seen the demand for aerial monitoring and communications solutions expand dramatically, with few tethered products on the market today able to meet the growing needs for cost-effective, mobile, actionable intelligence as reliable as Drone Aviation’s technology,” Nussbaum said in a news release.
Web.com earnings rise
Web.com Group Inc. on Thursday reported adjusted earnings of 63 cents a share for the first quarter, 7 cents higher than last year and 2 cents higher than the average analysts’ forecast, according to Thomson.
The Jacksonville-based company, which provides website development services for businesses, increased revenue by 11 percent to $153.4 million, due to its acquisition of digital marketing company Yodle in March.
“We’ve gotten off to a strong start in the weeks since the acquisition closed and feel confident in our ability to continue Yodle on its growth path and achieve our stated synergy targets,” CEO David Brown said in the company’s conference call.
Brown said Web.com expects the Yodle deal to be accretive to earnings by the fourth quarter.
Regency Centers’ stock jumps again
After CEO Hap Stein touted Regency Centers Corp.’s stock performance at the company’s annual meeting the previous week, Regency’s stock jumped to a nine-year high last week after a strong earnings report.
The Jacksonville-based shopping center developer reported core funds from operations of 80 cents a share in the first quarter, up from 74 cents last year and a penny higher than the average analysts’ forecast, according to Thomson.
Funds from operations are basically earnings excluding depreciation and amortization expenses and are considered the key earnings metric for real estate investment trusts like Regency.
Regency’s stock rose as much as $2.35 to $77.50 Wednesday after the earnings report, its highest level since early 2007, before the last recession began.
Mining unit helps FRP
FRP Holdings Inc. more than doubled earnings for the second quarter ended March 31 to $1.8 million, or 18 cents a share.
Jacksonville-based FRP is mainly engaged in commercial real estate development and management but in the company’s conference call last week, President David deVilliers spotlighted FRP’s smaller business unit.
“The real performer in this quarter was the mining and royalty segment,” he said.
The mining royalties business grew operating profit by 69 percent in the quarter, he said.
FRP was created out of operations that were once part of construction materials company Florida Rock Industries Inc. It continues to own properties that are leased out and mined for construction materials.
Strong construction activity in Florida and Georgia is driving the growth in that business, deVilliers said.
St. Joe profits from Deepwater Horizon claims settlement
The St. Joe Co. on Thursday reported a first-quarter profit of $8.7 million, or 12 cents a share, because of a settlement of claims related to the Deepwater Horizon oil spill.
The 2010 oil spill impacted the real estate developer’s beachfront properties in the Florida Panhandle. St. Joe recorded $12.5 million in pre-tax income related to its settlement with BP Exploration & Production Inc.
PHH reports loss
Struggling PHH Corp. last week reported a core loss of $24 million, or 45 cents a share, in the first quarter.
This follows a core loss of $152 million in 2015.
The New Jersey-based mortgage banking company, which has an operations center in Jacksonville, said it is continuing with its “strategic and capital review process” but had no further update.
Publix earnings up, stock value down
Publix Super Markets Inc. last week reported higher first-quarter earnings, but said the value of its stock still dropped.
The Lakeland-based supermarket chain’s earnings rose by 4 cents a share to 75 cents. Total sales rose 4.5 percent to $8.7 billion and comparable-store sales (sales at stores open for more than one year) rose 3.3 percent.
Despite the “strong” earnings, “these results were not enough to offset the challenges in the stock market,” CEO Todd Jones said in a news release.
Publix’s stock is not publicly-traded and it’s made available for sale only to employees, with its value determined by appraisals five times a year.
The latest appraisal determined the stock price fell from $45.20 on March 1 to $43.95 as of May 1.