Bloomberg News

Ryland Declines After Earnings Miss Estimates: Los Angeles Mover

January 29, 2012

Jan. 27 (Bloomberg) -- Ryland Group Inc. declined in heavier-than-normal trading after the homebuilder missed analysts’ estimates while reporting its first profitable quarter without tax assistance since 2006.

Ryland, which builds homes with an average price of $255,000 in 13 states, fell 1 percent to $18.40 at the close in New York. More than 3.27 million shares changed hands today, compared with a daily average volume of 1.31 million for the past year.

The company, based in Westlake Village, California, reported fourth-quarter net income of $812,000, or 2 cents a share, compared with a loss of $19.1 million, or 43 cents, a year earlier, according to a statement released yesterday after markets closed. Analysts expected net income of 9 cents, the average of 17 estimates in a Bloomberg survey.

“While orders and gross margins improved in 4Q, we believe that expectations were high going into the quarter,” Megan McGrath, an analyst with MKM Partners LLC, wrote in a note to investors today. Fourth-quarter results “could be regarded as a disappointment,” she said.

U.S. builders have struggled to profit as high unemployment and mortgage delinquencies stifled the housing market. About 302,000 new homes were sold in the U.S. in 2011, the worst year in records dating to 1963, the Commerce Department reported yesterday.

Ryland has lost money each quarter since 2006 except for the last three months of 2011 and the fourth quarter of 2009, when it recorded a $39 million profit after booking a refund of taxes paid during its profitable years.

Ryland also filed a shelf registration today with the U.S. Securities and Exchange Commission to prepare a possible offering of new debt, shares or warrants.

--Editors: Daniel Taub, Rob Golum

To contact the reporter on this story: John Gittelsohn in Los Angeles at johngitt@bloomberg.net

To contact the editor responsible for this story: Daniel Taub at dtaub@bloomberg.net


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