The St. Joe Company ( JOE ) - a real estate
investment trust (REIT) - reported its first quarter 2013 loss per
share of 3 cents, missing the Zacks Consensus Estimate of a loss of
a penny. Also, the loss slightly widened from the year-ago loss of
a cent per share.ST JOE CO (JOE): Free Stock Analysis ReportPLUM CREEK TMBR (PCL): Free Stock Analysis
ReportREGENCY CTRS CP (REG): Free Stock Analysis
ReportSIMON PROPERTY (SPG): Free Stock Analysis
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For the first quarter of 2013, total revenue at St. Joe stood at
$26.8 million, waning 12.1% from the prior-year quarter. However,
it came in ahead of the Zacks Consensus Estimate of $25 million.
While the company experienced strong performance in resorts,
leisure and leasing operations as well as timber segment, a fall in
revenue from real estate sales acted as a headwind.
Quarter in Detail
By segment, real estate sales revenue decreased 42.6% year over
year to $8.1 million. Residential revenue more than doubled to $7.9
million from $3.8 million reported in the prior-year quarter mainly
due to a rise in the number of residential lots sold.
However, commercial development revenue reported a decline of $5.8
million as the company had a large $5.4 million land sale in the
prior-year quarter. Also, rural land sale revenue fell $4.3
million as the company lacked the benefit of the rural land sales
that it had in the comparable prior-year period.
Revenue from resorts, leisure and leasing operations escalated
30.4% year over year to $9.0 million. Higher average room rates,
significant number of homes in its vacation rental business, an
earlier spring break as well as the full year effect of commercial
leases that commenced during 2012 led to an uptick in the segment's
revenue. Moreover, forestry revenue climbed 2.1% year over year as
a result of higher prices for pulp and sawtimber.
On the other hand, operating expenses registered a 9.7% decline
from the prior-year quarter to $29.0 million, mainly due to lower
staff expenses and stock compensation costs.
At the end of first-quarter 2013, St. Joe had $168.7 million of
cash and cash equivalents (up from $166.0 million as of the
prior-quarter end) and $26.7 million of pledged securities (down
from $26.8 million). Also, total debt outstanding was $35.8
million, slightly down from $36.1 million as of the prior-quarter
We are disappointed with the weak results at St. Joe. as a dip in
real estate revenues acted as a headwind. Moreover, persistent
reduction in revenues from rural land sales segment added to the
woes. Additionally, St. Joe's business is primarily concentrated in
Fla., which was one of the hardest hit states owing to the
recession and this adversely affected its bottom line in the recent
past. Given the current stressed economic environment in its key
markets, we believe the company lacks significant growth catalyst
in the near term and hence we remain bearish on the stock.
However, the company continues to focus on fixed cost reduction
and intends to make better use of its substantial land bank as it
experiences rising demand for ready-to-build residential lots and
Another REIT, Plum Creek Timber Company Inc. ( PCL ) reported
impressive results for first-quarter 2013. The company's earnings
per share reached 35 cents, comfortably surpassing the Zacks
Consensus Estimate of 32 cents. The results were driven by
increasing demand for wood products stemming from a recovery in the
residential construction market.
St. Joe currently has a Zacks Rank #4 (Sell). However, other REITs
that are performing better and are worth a look include
Regency Centers Corporation ( REG ) and Simon
Property Group, Inc. ( SPG ) , both carrying a
Zacks Rank #2 (Buy).