Home builder Ryland Group swings to profit but misses estimates

Ryland Group Inc. shares fell after the home builder missed analysts’ estimates while reporting its first profitable quarter without tax assistance since 2006.

Shares of Ryland, which builds homes with an average price of $255,000 in 13 states, fell 18 cents to $18.40 on Friday.

The Westlake Village company reported fourth-quarter net income of $812,000, or 2 cents a share, compared with a loss of $19.1 million, or 43 cents, a year earlier. Analysts expected net income of 9 cents a share, the average estimate in a Bloomberg survey.

“While orders and gross margins improved in [the fourth quarter], we believe that expectations were high going into the quarter,” Megan McGrath, an analyst with MKM Partners, wrote in a note to investors. Fourth-quarter results “could be regarded as a disappointment,” she said.

U.S. builders have struggled to profit as high unemployment and mortgage delinquencies stifled the housing market. About 302,000 new homes were sold in the U.S. in 2011, the worst year in records dating to 1963, the Commerce Department reported Thursday.

Ryland has lost money each quarter since 2006 except for the last three months of 2011 and the fourth quarter of 2009, when it recorded a $39-million profit after booking a refund of taxes paid during its profitable years.