Ryland says new home orders up 59 pct in April
WESTLAKE VILLAGE, Calif. (AP) — Ryland Group Inc.'s strong sales trends from the first three months of the year have continued into April, suggesting a healthy spring selling season for the homebuilder.
The Westlake Village, Calif., company said Tuesday that new home orders during the month, after cancellations, jumped 59 percent from April 2012.
While the company noted that a single month's worth of home orders should not be indicative of full-quarter results, the gain echoes Ryland's growth rate in the first quarter, when home orders grew 54 percent from a year earlier.
Ryland, which builds homes in 14 states, is benefiting from a sustained rebound in housing that began a year ago, powered by steady job growth, rock-bottom mortgage rates, rising home values and a decline in the number of homes ending up foreclosed.
Improved sales trends helped the builder post net income of $22.1 million for the three months ended March 31, reversing a loss from the year before. Revenue vaulted 74 percent to $374.7 million.
To seize on growing demand for homes, Ryland has bought three private homebuilders over the past year, said Raymond James analyst Buck Horne said in a research note issued Tuesday. And the company on Tuesday announced a sale of $250 million in debt that is convertible into common stock, whose proceeds it may use to buy land and make other acquisitions.
The string of acquisitions could help boost Ryland's market share, but have pushed the company's debt-to-capital ratio to 49 percent, as of the first quarter, from 22 percent in the fourth quarter of 2010, Horne said.
He lowered his rating on the homebuilder to "Underperform" from "Market Perform," citing concerns that the shares are worth more than the company merits. Year-to-date, Ryland shares are up 36 percent, while its homebuilding peers are up 22 percent, Horne added.
Ryland shares added 23 cents to $49.79 in afternoon trading. The stock has more than doubled over the past 12 months.