Profit Drops 43% for Newhall Land & Farming

Newhall Land & Farming Co., citing continued weakness in the local real estate market, reported a 43% drop in second-quarter profit and slashed its quarterly cash distribution in half.

The Valencia-based real estate development and agricultural concern said net income in the quarter ended June 30 fell to $2.28 million from $3.97 million a year earlier. Its revenue tumbled 36%, to $16.6 million from $25.9 million, because of fewer sales of houses and industrial sites.

Newhall Land also cut its quarterly distribution to 10 cents per partnership unit from 20, beginning with the next payout Sept. 14 to unitholders of record Aug. 7. (Newhall is organized as a master limited partnership, whose units trade publicly like shares of stock. Its distributions are similar to dividends.)

Newhall Land Chairman Thomas L. Lee said the company’s board decided to cut the dividend rather than risk delaying development of current projects. “Postponing promising projects would restrict the company’s potential and diminish its future profitability,” Lee said in a statement.

He also said Newhall Land’s real estate operations “remained under pressure” in the second quarter “due to the lingering recession in California and the lack of a backlog of home and land sales.”

For the first half of 1992, Newhall Land’s profit was virtually unchanged at $11.8 million, while its six-month revenue fell 29%, to $44.5 million from $63 million.