Sep 24, 2020
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St. Joe Actually Makes Money In Real Estate

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Even though The St. Joe Company is having trouble selling houses demand for rural land is soaring. On Tuesday the Florida real estate developer said a surge in rural land sales managed to offset weakening residential sales sending first-quarter earnings skyrocketing 63. 0%. St. Joe s shares fell 1. 1% or 45 cents to $41

 

55 in afternoon trading. The St. Joe Company s first-quarter net income jumped to $32. 1 million or 40 cents per share compared with $19. 7 million or 27 cents per share within the year-ago quarter. This includes impairment charges of two cents per share via continuing declines in certain property sales and listing prices and restructuring charges of below a penny per share compared with 3 cents per share in restructuring within the year-ago quarter

 

Revenue rose 23. 0% to $116. 8 million from $95. 0 million within the prior-year period. Analysts polled by Thomson Financial were expecting a profit of 18 cents per share on revenue of $80. 9 million. The corporate said total residential sales plunged to $17. 6 million down from $37. 0 million a year earlier

 

But rural land sales leaped to $91. 1 million from $46. 7 million within the first quarter of 2007. With the united states and Florida economies battling rising home foreclosures a tightening of credit and a significant inventory of unsold homes predicting when residential real estate markets will return to health remains difficult said Peter S

 

RummellPeter S. Rummell firm chairman. However demand for rural land remains strong and we’re having success selling non-strategic rural land parcels to a wide selection of customers. The corporate said it did not close any commercial land sales in the course of the first quarter and via the challenges within the retail industry it expects its revenue from commercial land sales to stay lumpy

 

Meanwhile on March 3 St. Joe sold 17. 1 million shares of its common stock for $580 million which was used to repay virtually all of the company s debt. On the end of the quarter the corporate had approximately $480. 3 million in available capacity under its $500 million revolving credit facility

 

St. Joe s successful equity offering has dramatically increased our financial flexibility in weathering the current market downturn said William S. McCalmontWilliam S. McCalmont the firm s chief financial officer. The corporate has also been working to reduce its capital expenditures and overhead expenses. It expects its capital expenditures in 2008 to be below $90 million and even lower in 2009

 

The Associated Press contributed to this article

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