The St. Joe Company (JOE)
- a real estate investment trust (REIT) - reported its fourth
quarter 2012 loss per share of 9 cents, missing the Zacks Consensus
Estimate of earnings of a penny. However, the loss narrowed from
the year-ago loss of $3.56 per share.ST JOE CO (JOE): Free Stock Analysis ReportPLUM CREEK TMBR (PCL): Free Stock Analysis
ReportSIMON PROPERTY (SPG): Free Stock Analysis
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For full year 2012, St. Joe recorded net income of $6.0 million or
7 cents per share, better than the Zacks Consensus Estimate of a
loss of 10 cents. Moreover, this compared favorably with the net
loss of $330.3 million or $3.58 per share in 2011. Notably, the
2011 figure included pre-tax non-cash impairment charges of $377.3
million or $3.52 per share, after tax.
Behind the Headlines
For the fourth quarter of 2012, total revenues stood at $22.6
million compared with $19.8 million in the year-ago quarter. The
year-over-year increase in total revenue stemmed from relatively
strong performance mainly from resorts, leisure and leasing
operations and timber sales segments.
For 2012, total revenues came in at $139.4 million compared with
$145.3 million in 2011. The decline was attributable to a dip in
revenues from timber sales segment, partially offset by improved
revenues from real estate and resorts, leisure and leasing
By segment, St. Joe's revenues from Residential segment stood at
$4.5 million compared to $3.4 million in the year-ago quarter.
Commercial segment revenues came in at $0.1 million versus $1.7
million, while revenues from Timber sales segment stood at $10.2
million compared with $7.7 million in the prior-year quarter.
Resort, leisure and leasing segment revenues came in at $7.8
million compared with $6.4 million in the comparable period.
Operating Activities During 2012
In 2012, the company sold 158 residential units compared with 133
units last year. At the same time, St. Joe witnessed a higher
demand in resort communities, which led to a significant hike in
prices. Consequently, revenues from residential real estate sales
increased 81% year over year.
Also, timber sales increased approximately 19% year over year as
more land was made available to timber harvesting. In addition,
strong investments in technology and infrastructure had a positive
impact on increased timber production.
During 2012, revenues from the company's resorts, leisure and
leasing operations business increased around 16% year over year,
impacted by strong summer vacation season and the initiation of
rent for two commercial leases in the second half of 2012.
In addition, the company adopted a new investment strategy, which
is expected to build upon the successful cost reduction initiatives
that were previously implemented and enable the company to increase
short and medium-term cash flows, reduce long-term risk and
maintain strong cash position necessary to withstand a tepid and
volatile real estate environment.
The company intends to continue investing in projects that are
expected to meet its risk-adjusted return criteria such as holdings
in Venture Crossings at the Airport, the Port of St. Joe, Breakfast
Point, primary home community in Northwest Florida, Rivertown and
primary home community in Northeast Florida. The impact of these
initiatives is likely to be viewed in 2013.
At the end of the year, St. Joe had $166.0 million of cash and
cash equivalents and $26.8 million of pledged securities. Also,
total debt outstanding was $36.1 million as it prepaid $19.3
million of debt at its RiverTown project.
St. Joe reported decent fourth quarter on the back of remarkable
growth across timber sales and resort, leisure and leasing
segments. However, slight dip in real estate revenues acted as a
headwind. However, the strategic investment initiatives, adopted by
the company, promise better growth prospects in the long term. We
expect such measures to help increase profitability of the company
and provide upside potential going forward.
Another REIT Plum Creek Timber Company Inc. (PCL)
reported impressive fourth quarter 2012 results with earnings per
share of 49 cents, significantly surpassing the Zacks Consensus
Estimate of 29 cents and the year-ago quarter earnings of 38
St. Joe currently has a Zacks Rank #3 (Hold). REITs that are
performing better and are worth a look include Ventas Inc.
(VTR) and Simon Property Group, Inc.
(SPG) , both carrying a Zacks Rank #2 (Buy).