Newport’s Presley Faults Slow Market for 65% Profits Drop for Quarter
Blaming the bruised California real estate market, Presley Cos. reported Thursday that its profits dropped 65% during the third quarter from the same time last year.
Presley, one of the largest and oldest home builders in the state, said net income for the quarter ended Sept. 30 was $693,000, or 1 cent per share, compared with net income of $2 million or 4 cents a share, a year ago. The company’s home sales, which included $7 million from land sales, dropped to $65.6 million from $71.3 million.
For the past nine months, the company reported a loss of $12.6 million, or 24 cents a share, compared to a profit of $4.5 million, or 8 cents a share, during the same time last year. Sales fell to $193.8 million from $201.8 million.
Wade H. Cable, president and chief executive officer at Presley, attributed the declines to the “continuing deterioration” in the California real estate markets, including Orange County. Presley closed sales on 356 homes during the quarter, down 6% from 380 a year ago. For the nine months, the closings were down 5% to 1,020 homes from 1,075 homes a year ago.
Still the company reported a 14% increase in new home orders during the quarter, mostly because of Presley’s return to the Arizona market.
In addition to California and Arizona, Presley has operations in New Mexico and Nevada. It has 44 sales locations, including 28 at its master-planned communities.
“If the California market turns around maybe they will survive,” said James Schmitt, analyst with Westcountry Financial, an investment company near Camarillo. “They just have so much land in inventory.”