Ryland reports $4.4 million loss in first quarter

May 01, 1991|By Timothy J. Mullaney

The Ryland Group Inc. of Columbia announced yesterday its first quarterly loss since the homebuilding industry's recession began but said new orders for its homes rose for the first time since 1989, providing some hope that coming quarters will be less gloomy.

Ryland said that it lost $4.4 million during the three months that ended March 31, compared with a profit of $6.5 million in the first quarter of last year. Ryland is the leading homebuilder in the metropolitan Baltimore market and is one of the largest builders of for-sale housing, as opposed to rental housing, in the nation.

The news had little effect on Ryland's stock, which has risen sharply this year in anticipation of a recovery in the new-home industry. Ryland closed yesterday at $22.125 a share, down 12 1/2 cents. Only 20,400 shares traded.

The fine print in Ryland's announcement pointed toward some progress, however. The company said orders for its homes rose 7 percent, to a total of 2,285 homes. The company said March was its strongest month for home orders in the last two years, and that the sales momentum carried over into April.

That means more profits in the second and third quarters because it takes so long for a new home deal to move from order to the actual purchase. Builders don't get paid until a customer closes on the home, a process that can take several months.

When the homes ordered during the quarter go to settlement, that will mean rising revenues, much as the first quarter's 35 percent decline in settlements led to a 27 percent drop in revenues.

The company warned investors to expect improvements, but not miracles, for the rest of the year.

"While we continue to anticipate a difficult year, we expect our quarterly results to improve gradually as 1991 progresses," said Roger W. Schipke, the company's new chairman and chief executive officer.

Three months ended 3/31/91

.....Revenue .....Net .........Share

'91 231,789,000 (4,389,000) (0.41)

'90 319,185,000 6,467,000 0.42

% change -27.4 .. .. .--. .. .. --'

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