Rayonier Advanced 2025 Q1 Earnings Misses Targets as Net Income Declines 1500%

Rayonier Advanced (RYAM) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company missed expectations with a significant net income decline, posting a net loss of $32 million compared to $2 million in the previous year. Adjusted EBITDA was reported at $17 million, down $35 million year-over-year, affected by a $12 million non-cash environmental charge. Guidance for adjusted EBITDA is now between $175 million and $185 million and adjusted free cash flow is projected to be between $5 million and $15 million, reflecting ongoing challenges.

Revenue

Rayonier Advanced's revenue for Q1 2025 totaled $356 million, marking an 8.2% decline from $388 million in Q1 2024. Cellulose Specialties generated $201 million, Cellulose Commodities contributed $75 million, and Biomaterials accounted for $7 million. Paperboard provided $49 million, while High-Yield Pulp added $31 million. Eliminations impacted revenue by $-7 million, resulting in net sales of $356 million.

Earnings/Net Income

Rayonier Advanced's losses widened significantly to $0.49 per share in Q1 2025 from a loss of $0.02 per share in Q1 2024, signaling a substantial decline in earnings performance.

Price Action

The stock price of Rayonier Advanced has edged up 0.72% during the latest trading day, has edged down 2.54% during the most recent full trading week, and has plummeted 19.31% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Rayonier Advanced Materials (RYAM) shares after a revenue increase quarter-over-quarter and holding for 30 days has seen mixed outcomes over the last five years. While there were some immediate gains following revenue increases, the overall performance was affected by broader market trends and fluctuations in RYAM's stock price. Notably, the stock surged by 17.62% on the day of the Q1 2025 earnings announcement, and similarly, a 21.0% increase was observed after the Q4 2024 earnings beat. Short-term holding strategies captured these immediate gains, but the performance declined as the holding period extended beyond the immediate post-earnings period. Over the longer term, the strategy faced challenges due to significant stock volatility, with a 52-week low of $3.72 and a high of $10.28. RYAM's market capitalization remained stable at $285.10 million, and the company displayed sufficient liquidity with a quick ratio of 1.09 and a current ratio of 1.73.

CEO Commentary

"Despite near-term challenges in the macroeconomic and regulatory environment, we remain focused on creating long-term value and are confident in the strength of our core business and strategic positioning," said De Lyle Bloomquist, President and CEO of Rayonier Advanced Materials Inc. He noted that first-quarter results fell short of expectations due to factors such as a $12 million non-cash environmental charge, lower cellulose specialties sales volumes, higher input costs, and operational challenges. Additionally, demand in Paperboard and High-Yield Pulp businesses remained soft. Bloomquist emphasized the company's strong balance sheet and ample liquidity to navigate these pressures while delivering long-term shareholder value.

Guidance

"We now project 2025 Adjusted EBITDA to range between $175 million and $185 million. We also expect 2025 Adjusted Free Cash Flow to approximate $5 million to $15 million." The company highlighted that its annual revenues are exposed to significant import tariffs from China, impacting operational performance and customer supply chain adjustments. Despite these challenges, Rayonier Advanced maintains confidence in managing near-term pressures and meeting debt covenants.

Additional News

Rayonier Advanced Materials recently announced its participation in major equity conferences in March 2025. CFO Marcus Moeltner presented at the Sidoti Small Cap Equity Conference on March 19, and CEO De Lyle Bloomquist spoke at the Gabelli Funds 16th Annual Specialty Chemicals Symposium on March 20. These events provided opportunities for one-on-one meetings with management. Additionally, RYAM raised €67 million in green capital financing, supporting its biomaterials strategy, with funds allocated to bioethanol and prebiotics projects, aiming for EBITDA growth by 2027. Lastly, the company released its 2023 Sustainability Report, highlighting progress in environmental stewardship and social responsibility initiatives, including significant reductions in greenhouse gas emissions and increased use of renewable energy sources.