As further evidence of the slump in the homebuilding industry, the Columbia-based Ryland Group, Inc. says its earnings in the third quarter were barely half of what they were a year ago.
The company reported earnings of $5.8 million, or 38 cents a share, on revenues of $334 million in the quarter, compared with $10.9 million, or 73 cents a share, on revenues of $368.5 million for the same period in 1989.
Ryland Building Co. sold 2,113 homes during the third quarter of 1990, a 14 percent drop from the same period last year.
Even worse, new orders for houses decreased 35 percent from 1989's third quarter. The dollar volume of outstanding contracts also declined 35 percent compared to Sept. 30, 1989.
In the one bright spot, the company reported that revenues from its financial services segment increased 32 percent, primarily due to increases in mortgage and bond servicing and favorable interest rate spreads.
In the first nine months, profit dropped 55 percent. Ryland earned $17.9 million, or $1.18 a share, on sales of $977 million compared with earnings of $40 million, or $2.73 a share, on sales of $1 billion last year. However, the 1990 results reflect in part an accounting change. Without the accounting change, the company would have earned $26 million, or $1.93 a share, in the nine months.
In the first nine months, the company reported a 7 percent decline in the number of houses sold and a 25 percent decrease in new orders compared with the same period last year.
"We recognize that we must operate our business successfully in what are currently very changeable times," said Chairman and Chief Executive Officer C.E. "Ted" Peck. "Although we do not look for a turnaround in the near future, we believe that our conservative operating and financial strategies, including our regional diversification and our limited investment in land, will serve us well in the long term."
Company spokesman Nancy Smith said that home buyers have been discouraged by the Middle East crisis and talk of recession. With orders down, Ryland expects the sales slump will continue at least into the next quarter, she said.
Ryland also said that Roger W. Schipke, currently president of The Ryland Group, has taken on full responsibility for the company's operations, in a previously announced management transition. Schipke will be named Ryland's chief executive officer at the end of the year, replacing Peck, who is retiring.