Rayonier Inc.

What they do

Rayonier grows and sells standing timber and delivered logs from timberlands it owns or leases under long-term agreements across Alabama, Arkansas, Florida, Georgia, Louisiana, Oregon, South Carolina, Texas and Washington. Its Real Estate segment sells properties better suited to development, recreational or residential use, and opportunistically disposes of non-strategic timberlands. Following the PotlatchDeltic merger, it added a Wood Products segment producing dimensional lumber and industrial-grade plywood at six sawmills and one plywood mill. It describes itself as the second largest publicly-traded timberland REIT.

Revenue drivers

• Southern Timber — 2025 sales of $228.3 million and operating income of $61.1 million; sells pine pulpwood (3,460 thousand tons in 2025) and pine sawtimber primarily at auction, with most volume consumed domestically.
• Pacific Northwest Timber — 2025 sales of $83.6 million and operating income of $1.9 million; sells to domestic lumber customers with log exports to Asia-Pacific also contributing to demand.
• Real Estate — 2025 sales of $172.6 million and operating income of $62.3 million, including $47.2 million Improved Development, $48.6 million Rural, and $53.5 million Timberland & Non-Strategic; results swing with Large Dispositions ($495.0 million in 2024, none in 2025).
• Wood Products — Added through the January 30, 2026 PotlatchDeltic merger; produces dimensional lumber and industrial-grade plywood at six sawmills and one plywood mill, with demand tied to U.S. new residential construction and repair-and-remodel activity.

Recent performance

Second quarter 2026 net income attributable to Rayonier was $19.1 million, or $0.06 per diluted share, on revenues of $396.5 million, versus net income of $408.7 million, or $2.63 per diluted share, on revenues of $106.5 million in the prior year quarter. Prior year results included a $404.4 million gain on sale of discontinued operations from the New Zealand joint venture divestiture completed in June 2025. Second quarter 2026 pro forma net income was $31.5 million, or $0.10 per diluted share, and Adjusted EBITDA was $123.7 million versus $44.9 million a year earlier, reflecting the inclusion of PotlatchDeltic operations for the full period. Results included $10.2 million after-tax merger costs and $2.3 million of timber write-offs from a casualty event. The company repurchased $72.4 million of shares at an average price of $20.95 per share, and reported debt of $1.86 billion and cash of $411.8 million as of June 30, 2026.

Strategy

Rayonier completed its merger with PotlatchDeltic on January 30, 2026, issuing approximately 140.9 million Rayonier common shares, with PotlatchDeltic stockholders receiving 1.8185 Rayonier shares and $0.61 in cash per share. Management states the transaction significantly expands the timberland portfolio and introduces wood products manufacturing, enhancing scale, geographic diversity and long-term growth prospects. In June 2025, the company sold its 77% interest in a New Zealand joint venture, classifying those operations as discontinued. Effective in the third quarter of 2025, it realigned reporting so U.S. South and Pacific Northwest log trading activities are reported within the respective timber segments. It also repurchased $72.4 million of shares in the second quarter of 2026.

Risks

• Lumber and housing market sensitivity — Southern Timber and Pacific Northwest Timber are sensitive to U.S. lumber markets tied to housing starts, and a portion of Northwest harvest is tied to lumber price indices.
• Trade policy and tariffs — A 10% ad valorem duty on softwood timber and lumber imports took effect October 14, 2025, and lower final AR7 Canadian duties could adversely impact domestic lumber prices, wood products production and log demand.
• Inflation and input costs — Higher energy, fuel, labor and tariff-driven equipment costs could compress margins and affect harvest levels for Rayonier and its logging and hauling contractors.
• Merger integration and purchase accounting — The PotlatchDeltic acquisition is accounted for as a business combination with preliminary fair value estimates subject to change for up to one year, and the company assumed pension and OPEB obligations remeasured at the acquisition date.

Outlook

The second quarter 2026 results include PotlatchDeltic operations for the entire period, compared with standalone Rayonier results a year earlier. Management notes that the 10% Section 232 duty and higher 2025 Canadian lumber duties have supported domestic lumber prices and incentivized domestic wood products production. However, it also flags that a final AR7 determination materially below current cash deposit rates could adversely impact domestic lumber prices, wood products production, and log demand and pricing. Additional details on the merger are expected to be reflected in subsequent reporting.