Rayonier's land sales beat the plan. Its timber harvest missed.

Rayonier's land business delivered more profit than it had forecast for the third quarter. Its timber harvest fell short, and the company narrowed the top end of its annual harvest targets.

Real-estate adjusted EBITDA reached $48.5 million, well above the $25 million to $35 million range issued in August. That measure excludes interest, taxes, certain noncash costs and the gain on a separate large timberland disposition.

The mixed performance comes as Rayonier adds a new $300 million authorization to buy back shares. The authorization expands its options for returning capital while parts of the timber market remain soft.

The land business delivered the surprise

Rayonier sells some land for uses that can be more valuable than growing timber. The quarter included development-land transactions and rural sales, producing $63 million of real-estate revenue before a separate $145 million timberland disposition.

The $48.5 million adjusted profit contribution came without that large disposition gain. Rayonier now expects another $60 million to $70 million of real-estate adjusted EBITDA in the fourth quarter, based on its transaction pipeline and sales already closed in that quarter.

Land transactions depend on what closes in each period. This quarter's forecast beat sits alongside a much lower real-estate adjusted EBITDA figure than the $73.8 million reported a year earlier.

The timber side has a different message

Southern harvest was 3.025 million tons, below the original quarterly range of 3.1 million to 3.3 million. Northwest harvest was 571,000 tons, against an expectation of about 600,000.

The annual Southern range is now 12.2 million to 12.4 million tons, from 12.2 million to 12.5 million in August. The Northwest ceiling drops to 2.1 million tons from 2.2 million, with its 2 million-ton floor unchanged.

The mills had a better quarter. Lumber shipments of 327 million board feet were within the 320 million to 330 million range, and price realizations remained strong. Rayonier expects lower lumber prices in the fourth quarter as markets soften and seasonal demand slows.

Comparing these results with Rayonier's own earlier forecasts is particularly useful this year. Its January merger with PotlatchDeltic added timberland and a wood-products business. The current results include those operations; last year's group figures do not.

A large land deal was mainly a swap

The headline net income of $123.3 million included a $90.6 million gain from the Washington timberland disposition. It is a different signal from the recurring contribution of harvesting, mills and ordinary land sales.

The $145 million Washington sale and a $146 million purchase of timberland in Texas and Alabama closed together in August as a tax-efficient exchange. The quarterly supplement shows $142.7 million of acquired timberland was exchanged without cash. Total cash spending on timberland acquisitions in the first nine months was $11.5 million.

That transaction reshaped the land portfolio. It did not leave the company with $145 million of sale cash freely available for buybacks.

More buyback capacity, with cash already leaving

The board approved the additional $300 million on November 3. It adds to the older program, which still had $66.2 million available at September 30.

Rayonier had already spent $163.2 million buying shares in the first nine months and paid $236.3 million of common dividends. Operating cash flow was $252.2 million, with another $70.1 million spent on capital projects and $16.8 million on real-estate development.

Cash ended September at $361.4 million, down from $842.9 million at the start of the year. The company also repaid $227.5 million of debt. The new authorization gives it flexibility to buy shares; the pace will determine how much of that remaining cash it uses.

The Rayonier company profile tracks the merger, segment forecasts and cash measures. The next results will show whether the land-sale pipeline delivers again as timber harvests and lumber pricing face a softer outlook.