The St. Joe Company (JOE) reported third-quarter 2014 net loss of $0.1 million, or zero cents per share against net income of $4.2 million, or 5 cents per share in the year-ago quarter.
Results also came below the Zacks Consensus Estimate of 2 cents per share as both real estate and timber sales were down. The company’s total revenue for the quarter came in at $24.0 million, down 34.8% from the year-ago quarter.
Quarter in Detail
Real Estate sales plunged to $3.9 million from $12.8 million reported in the prior-year quarter. The substantial decrease stemmed from Residential Real Estate revenues that tumbled year over year to $3.7 million from $10.7 million as a result of a decrease in availability of finished lot as well as the timing of a sixty-two homesite sale to a homebuilder in third-quarter 2013. Moreover, the company generated no significant commercial real estate sales in the quarter under review against $2.1 million in the prior-year quarter.
Timber sales too declined to $1.1 million from $7.7 million in the comparable period last year, as a result of the AgReserves sale that closed in March 2014, resulting in tons delivered being less than 80,000 in the quarter under review versus 373,000 in the year-ago quarter.
Nevertheless, the company’s resorts, leisure and leasing segment performance offered some cushion to this downside. This segment’s revenues climbed 16.6% year over year to $19.0 million. The uptick was propelled by incremental resorts and leisure revenues, mainly attributable to a rise in room nights rented, and additional leasing revenue from leases in the Pier Park North joint venture with tenants occupying retail stores.
As of Sep 30, 2014, St. Joe’s cash, cash equivalents and investments amounted to $657.6 million, significantly up from $168.9 million as of Dec 31, 2013.
Our Viewpoint
Earnings miss at St. Joe is surely discouraging and in fact, the decline in sales revenue from a number of its segments adds to our concerns. However, in the long run, we believe that the company’s focus on enhancing its resort-based operations would help it to recover the profitability.
St. Joe currently has a Zacks Rank #2 (Buy). Investors interested in the real estate industry may consider other stocks like Altisource Residential Corporation (RESI), Brookfield Property Partners L.P. (BPY) and Mitsubishi Estate Co., Ltd. (MITEY). All these stocks carry the same rank as St. Joe.
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