Ryland Net Income Jumps 20% as Home-Building Revenue Rises
Ryland Group Inc., a top 10 U.S. home builder, on Wednesday said quarterly profit rose about 20%, despite crippling weather that delayed construction and home closings.
The Calabasas-based company also raised its outlook for the year.
Ryland said first-quarter profit rose to $62.7 million, or $1.25 a share, from $52.4 million, or $1.03, a year earlier.
Analysts revised downward their average forecast last month and expected the company to earn $1.23 a share, according to Reuters Estimates.
Home-building revenue rose 16.3% to $858.4 million, primarily because of a 12% increase in the average closing price of a home, to $271,000, and more homes sold. Home-building revenue from land sales totaled $8.5 million in the first quarter, up from $3.8 million the previous year.
Gross profit margins from home sales averaged 23.2%, up from 22.3% a year earlier.
Last month, Ryland said bad weather in Southern California, Nevada, Maryland and Arizona postponed closings of 225 homes to later months. The company said it expected first-quarter earnings to exceed last year’s first-quarter earnings of $1.03 a share by at least 15 cents a share.
Orders for homes rose 2.7% to 5,102 units on an expanded number of selling communities -- 372 compared with 306 at the end of March 2004.
“The orders are going to be viewed as disappointing on the Street, especially in light of the tremendous growth in communities,” said Rick Murray, a Raymond James & Associates analyst.
Ryland ended the quarter with a backlog of 9,584 homes under contract, up 23.3%. The dollar value of the company’s backlog was $2.7 billion, up 32.8%.
Looking ahead, Ryland said it expected 2005 earnings to exceed $7.50 a share, up from its prior forecast of more than $7.25. Analysts expect Ryland to earn $7.64 a share for the year.
Ryland released its results after the market closed. In regular trading on the New York Stock Exchange, shares fell $1.80 to $58.06 but rose as high as $59.09 in after-hours activity.
