State’s Largest Land Owner Sees Profits Rise From North Florida Real Estate Sales
Florida’s largest private landowner said first-quarter profit rose more than five-fold on the strength of rural land sales in the Panhandle.
Net income for the three months ended March 31 climbed to $19.9 million, or 27 cents a share, from $3.7 million, or 5 cents, a year earlier. However, revenue fell by 18 percent to $96.3 million, due in part to a slow North Florida housing market.
Proceeds from the sale of undeveloped, rural land enabled St. Joe to post its first profitable quarter since December 2005 as the company shifts its focus from building homes to what CEO Peter Rummell described as building towns, a process he said would be completed in the middle of 2008.
“The Florida housing market is the worst housing market in the nation right now in terms of the supply they have,” said Alex Barron, senior analyst with JMP Securities LLC in San Francisco.
“St. Joe has shifted to selling land to home builders.”
With Florida mortgage activity slow throughout the state, it’s biggest land owner has had to shift it’s business model significantly.
The company issued earnings before regular U.S. trading today. The shares fell $2.02, or 3.4 percent, to $56.63 yesterday in New York Stock Exchange composite trading. The stock has dropped 2.8 percent this year to date.
St. Joe said yesterday it is selling home building operations in the Middle Atlantic states, primarily under the name Saussy Burbank, to an investor group based in Charlotte, North Carolina, for $74 million.
The real estate developer group will pay St. Joe $36 million in cash with the other $38 million financed by St. Joe, with transaction scheduled to close later this week.
Last month, St. Joe bought Bay Point Marina near Panama City, Florida, for $9.8 million. Some property owners in St. Joe’s resort developments may be able to use the marina, the company said.
As revenue declines as fewer people apply for Florida mortgages and buy homes, the company has been reeling a bit, and has announced it’s selling its portfolio of 17 office buildings in seven markets.
St. Joe owns 805,000 acres in Florida, more than Rhode Island. About 334,000 of those acres are within 10 miles of the Gulf of Mexico, the company said.
SOURCE: Bloomberg News
