Standard Pacific’s Earnings Rise 29%

Home builder Standard Pacific Corp. said Thursday that its third-quarter profit surged 29% as it delivered more houses at higher prices in California and Florida.

While the Golden State remains one of the Irvine-based company’s top markets, Chief Executive Stephen Scarborough told analysts that next year -- for the first time in the firm’s 38-year history -- “we expect to deliver more homes in a state other than California.”

That state looks to be Florida, where nearly 4,000 homes are slated to be completed in 2005 versus about 3,400 in California.

“This is an important change for a firm that was predominantly a Southern California builder,” said analyst Greg Gieber of A.G. Edwards & Sons.

Standard Pacific ranks as the 11th-largest U.S. builder by revenue and, like other publicly traded builders, has taken heat from some on Wall Street for being too reliant on California, where high prices have pumped up their bottom lines. But as the state’s housing market cools, the sector has been under pressure to further diversify operations.

California accounts for about 35% of Standard Pacific’s deliveries. During the quarter ended Sept. 30, the company sold 864 homes in California at an average price of $651,000, a 30% increase over last year. (The company’s average home price rose 26% to $376,000 nationwide.)

The California numbers helped drive Standard Pacific’s third-quarter net income to $74.6 million, or $2.16 a share, compared with profit of $57.9 million, or $1.72, a year earlier. The per-share earnings beat analysts’ expectations of $2.02 and the company’s own forecast of $1.90 to $1.95.

Home-building revenue rose 39% to $866 million on record deliveries of 2,353 homes, up 5% from the same year-ago period.

New orders rose 5% to a record 2,474. In Southern California, orders fell 12% primarily because of surging home prices in the last few years. In Northern California, orders were up 1.6%.

Although hurricanes in the Southeast delayed the completion of about 400 homes during the quarter, Standard Pacific ended the period with a backlog of 6,956 homes valued at $2.4 billion, a 51% rise from 2003.

On the strength of the backlog, Standard Pacific raised its earnings forecast for 2004 to $8.75 a share from its previous range of $8.60 to $8.70 and offered a projection for 2005 of $9.80 to $10 a share.

Next year, the builder expects to deliver 12,000 homes, up 30% over 2004’s projected total of 9,000. But the average price is expected to fall as the firm sells more units outside California.

Standard Pacific’s stock rose $1 to $56.75 on the New York Stock Exchange.