Ryland reports a narrower loss
Home builder Ryland Group posted a narrower third-quarter loss Wednesday as the Calabasas company sold fewer homes and booked fewer orders for new dwellings amid the construction slump.
The news came on a day that the government released data showing that new orders for U.S. homes fell unexpectedly last month, raising concerns that consumers will slow their home purchasing as a federal tax credit for first-time buyers approaches its expiration at the end of November.
The Commerce Department reported that sales of new single-family houses in September fell 3.6% from August to a seasonally adjusted annual rate of 402,000. This represents a supply of 7.5 months’ worth at the current sales rate. Sales were down 7.8% compared with a year earlier.
Patrick Newport, an economist with IHS Global Insight, told clients in a note that the expiration of the federal government’s $8,000 credit for first-time buyers was likely to hurt demand for new homes.
“If the tax credit for new homeowners is not extended and expanded, housing demand will take a hit, and home sales will drop,” he wrote.
For the three months that ended Sept. 30, Ryland lost $52.5 million, or $1.20 a share, compared with a loss of $66 million, or $1.54 a share, a year earlier. The $1.20-a-share loss exceeded the average forecast of analysts for a loss of $1.08, as surveyed by Bloomberg.
Ryland said it booked $315.8 million in home sales, a 40% decline from the same period a year earlier, when the company sold $526.2 million. Total revenue fell 40% to $327.8 million.
The company released its earnings after the close of trading, and executives declined to comment until after a conference call with analysts scheduled for this morning. In after-hours trading Wednesday, the shares crept up 4 cents to $18.70. They had fallen $1.39 to $18.66 in regular trading.
All of the company’s regional home-building operations lost money in the third quarter, with its Southeast division -- which includes Atlanta, Charleston, S.C.; Charlotte, N.C.; Orlando, Fla.; and Tampa, Fla. -- losing the most: $33 million. The company’s West division -- which includes California cities, Las Vegas and Phoenix -- lost $3.8 million.
The company booked a total of 1,270 new orders for homes in the third quarter, slightly fewer than the 1,284 orders it logged at the end of the same period last year.
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