Ryland 3Q Loss Narrows On Fewer Write-offs But Revenue Slumps
DOW JONES NEWSWIRES
Ryland Group Inc.'s (RYL) third-quarter loss narrowed as the home builder and
mortgage-finance company posted fewer write-offs and valuation adjustments and
orders posted a small decline.
There is concern that the housing market, already struggling for years, will
soften if an $8,000 tax credit to lure first-time home buyers isn't extended
beyond Nov. 30. The major housing industry trade groups have mounted a vigorous
campaign to push for the credit's extension and last week, Sen. Johnny Isakson (
R-Ga.) said the credit was key to reducing oversupply and stimulating the
crucial "move up" market.
In August, Standard & Poor's Ratings Services lifted its outlook on Ryland's
junk-level ratings to stable, citing the company's healthy cash position, as
well as its largely developed owned lot position and lack of near-term debt
maturities.
Ryland, which last reported a profitable quarter in 2006, on Wednesday posted
a loss of $52.5 million, or $1.20 a share, compared with a year-earlier loss of
$65.7 million, or $1.54 a share. The latest results included $39.1 million of
valuation adjustments and write-offs, while the year-ago quarter included $64.8
million of those charges.
Revenue slumped 40%, to $327.8 million.
Analysts surveyed by Thomson Reuters projected a loss of 88 cents on revenue
of $354 million.
Gross margin fell to 10.8%, excluding items, from 11.8%. New orders fell 1.1%,
to 1,270 units, and closings declined 34%, to 1,323. The inventory of unsold
homes dropped 30%, to 447 units, from the beginning of the year.
In the financial-services segment, the company posted a 32% decline in the
number of mortgages originated.
Ryland's shares fell 0.4%, to $18.58 in after-hours trading, after closing
down 6.9% in the regular session amid a broad market decline.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com
(END) Dow Jones Newswires
10-28-091652ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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