Builder reports 1st profit in 3 years

Irvine-based Standard Pacific Homes reported today that it had its first profitable quarter after 12 quarters of red ink.

The firm, which builds homes in eight states, reported that it generated a net income of $82.7 million in the fourth quarter last year.

However, when adjustments are made for tax refunds and paper losses, the firm ended the quarter about $4 million in the black.

That rates as its best performance since the third quarter of 2006, its last profitable period.

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Specifically, the company reported:

  • Last quarter’s net income of $82.7 million was up from a net loss of $397.8 million in the fourth quarter of 2008.
  • $94.1 million of last quarter’s revenue came from new tax rules that allow homebuilders to carry losses back five years instead of two. All told, the company expects a $103 million tax refund early this year.
  • Excluding paper losses, restructuring costs and the tax benefit, the company’s net income totaled $4 million.

Other highlights include:

  • Home sales were up, but prices were down from the year before.
  • The net total for home-sale contracts last quarter was up 1% to 547 new homes, even though the company had 48 fewer developments offering homes for sale. The number of homes closing escrow decreased 18%, however.
  • The average sales price decreased 3% to $318,000. In California, the average price fell 3.7% to $447,000.
  • For the year as a whole, the company had a net loss of $13.8 million in 2009, compared to a net loss of $1.2 billion in 2008.

Ken Campbell, the company president and CEO said:

“We are pleased with our fourth quarter results, particularly with the improvement in our gross margin and average selling price as compared to the 2009 third quarter, as well as with the significant level of cash generation we achieved. Notwithstanding the challenging economic and housing market conditions that exist, we look ahead to 2010 with the goals of returning to profitability and rebuilding our land portfolio.”

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