Ryland Group Inc.'s (RYL) second-quarter loss narrowed as the
home builder and mortgage-finance company reported smaller
write-offs and valuation adjustments.
Shares were down 2.3% to $20 in after-hours trading as revenue
fell short of analysts' expectations. The stock has been rebounding
recently, but is still down by about three-quarters from its high
in 2005.
Optimism for home builders has grown amid signs the economy and
housing markets are stabilizing. That sentiment was fed nearly two
weeks ago, and markets rallied on a Commerce Department report that
showed housing starts rose to a seven-month high in June.
Still, concerns remain about mounting job losses and tighter
credit. Other challenges include a rising tide of foreclosures that
is adding to an already high supply of unsold homes.
Ryland, which last reported a profitable quarter in 2006, posted
a loss of $73.7 million, or $1.70 a share, compared with a
year-earlier loss of $241.6 million, or $5.70 a share. The latest
results included $47.3 million of valuation adjustments and
write-offs, while the year-ago quarter included $180.4 million of
those charges and a tax charge of $124 million.
Revenue slumped 44% to $272.2 million.
Analysts polled by Thomson Reuters expected a loss of $1.04 a
share on revenue of $305 million.
Gross margin fell to 7.8%, excluding items, from 12.5%. New
orders slid 16% to 1,716 units, and closings fell 40% to 1,091. The
inventory of unsold homes dropped 34% to 448 units.
In the financial-services segment, the company posted a 39%
decrease in the number of mortgages originated.
-By John Kell and Jay Miller, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com