Home Builders Predict
Lower Profits This Year
From The Wall Street Journal Online
May 26, 2006
Home builder Ryland Group Inc. cut its earnings outlook again, citing a 35% drop in home sales thus far in the current quarter.
The Calabasas, Calif., company said Wednesday it now expects per-share profit of $8.50 to $9 for 2006. In late April, Ryland had projected annual earnings of $9.50 a share, itself representing lowered expectations amid a slowdown in the housing market.
The company, which operates in 28 markets across the country, said its latest 2006 outlook was based on booking approximately 16,500 to 17,000 homes with gross profit margins of 23.2%.
Ryland also said it expects to post a second-quarter profit of $1.95 to $2 a share.
Analysts polled by Thomson First Call were expecting per-share earnings of $2.25 for the second quarter and $9.39 for the full year.
On Tuesday, luxury-home builder Toll Brothers Inc. slashed its 2006 fiscal-year forecast amid sluggish sales and big inventories.
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