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Ryland Fourth Quarter Results Top Estimates

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Homebuilder Ryland Group, Inc. (RYL: Quote) reported Tuesday a profit for the fourth quarter that soared from last year, reflecting strong double-digit Home building revenue growth amid improved margins, home closings and average price. Both adjusted earnings per share and quarterly revenues topped analysts' expectations.

The Westlake Village, California-based homebuilder and a mortgage-finance company reported net income of $28.57 million or $0.55 per share for the fourth quarter, sharply higher than $812 thousand or $0.02 per share in the prior-year quarter, reflecting impressive home building revenue.

Net income from continuing operations for the quarter soared to $28.95 million or $0.56 per share from $1.26 million or $0.03 per share in the year-ago quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter surged 68.3 percent to $440.14 million from $261.44 million a year ago, and topped sixteen Wall Street analysts' consensus estimate of $404.35 million.

Home building revenues for the quarter rose 67.7 percent to $427.52 million, primarily attributable to a 58.9 percent increase in closings that totaled 1,567 units as well as to a 5.9 percent increase in average closing price. Housing gross profit margin improved 190 basis points to 20.0 percent from last year.

Financial services revenues nearly doubled to $12.61 million from $6.53 million last year.

New orders increased 64.1 percent to 1,493 units, and new order dollars rose 82.0 percent to $425.9 million from a year ago.

Average monthly sales absorption rate was 2.1 homes per community, up from 1.4 homes per community in the year-ago quarter, and an average cancellation rate of 17.9 percent, compared to 21.4 percent last year.

Backlog at the end of the quarter stood at 2,391 units, up 61.4 percent from 1,481 units at the end of the year-ago quarter, and dollar value of the backlog was $663.4 million, reflecting a 73.8 percent rise from the end of the prior-year quarter.

For fiscal 2012, the company reported net income of $40.38 million or $0.84 per share, compared to a net loss of $50.75 million or $1.14 per share in the prior year. Net income from continuing operations was $42.38 million or $0.88 per share, compared to a loss of $29.87 million or $0.67 per share in the year ago.

Total revenue for the full year increased to $1.31 billion from $889.53 million in the previous year. Homebuilding revenues increased 47.3 percent to $1.27 billion.

Street was looking for full-year 2012 earnings of $0.77 per share on annual revenues of $1.27 billion.

RYL closed Tuesday's regular trading session at $41.31, up $1.48 or 3.72% on a volume of 1.83 million shares. The stock gained a further $1.39 or 3.36% in after-hours trading.

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by RTT Staff Writer

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