Current Events, Home Prices, Homebuilders, Housing Starts

Ryland posts larger-than-expected loss

From Reuters:

Ryland Group Inc (RYL.N: Quote, Profile, Research) posted a deeper quarterly loss that badly missed analyst estimates on Wednesday, citing write-offs, impairments and a charge, and its shares fell more than 6 percent.

The second-quarter net loss widened to $241.6 million, or $5.70 per share, from $52.4 million, or $1.25 per share, a year earlier, missing the average analyst estimate for a loss of 85 cents per share. 

Home-building revenue for Ryland, the No. 9 U.S. home builder, fell 35 percent to $472.3 million, as closings dropped 26 percent to 1,828 homes and the average selling price declined 13 percent to $254,000. 

New orders in the quarter fell 19 percent to 2,045. 

The U.S. housing market has been in decline since July 2006, when excessive building and loose credit standards triggered a drop in prices and a wave of foreclosures.

As prices have dropped, home builders have had to mark down the value of the inventory on their books. Ryland’s quarterly results included $180.4 million in such impairments and write-offs, as well as a non-cash tax charge of $124 million.

Yet another homebuilder takes it on the chin. The question is: with home sales continuing to decline, housing starts down, and prices in freefall, how long before the homebuilders start collapsing like a house of cards?

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