Newhall Land Feels Slump in Real Estate

Newhall Land & Farming Co., tripped up by the real estate slump, said its fourth-quarter profit tumbled 65% from a year earlier on a 47% decline in revenue.

Newhall, which is developing the master-planned community of Valencia in the Santa Clarita Valley, said its net income in the quarter that ended Dec. 31 fell to $10.2 million from $28.8 million a year earlier. Its revenue dropped to $51.9 million from $97.2 million.

The declines were “due primarily to the weak real estate market during 1990 and lack of residential land sales,” the company said. Newhall said 540 houses closed escrow during the year, down from a record high 574 in 1989. “The 1990 closings were concentrated in lower-priced homes where profit margins are lower,” it added.

For 1990, Newhall’s profit fell 44%, to $38.4 million from $68.7 million, and its annual revenue declined 19% to $193.9 million from $238.3 million.