Ryland earnings shot up 20% in 3rd quarter

October 30, 1991|By Timothy J. Mullaney lDB

The Ryland Group Inc. showed signs that it is shaking off the recession as it reported third-quarter earnings that were up 20 percent from the very weak third quarter of 1990. The Columbia-based homebuilder, one of the nation's biggest and the market leader for metropolitan Baltimore, said that its third-quarter order rate also boded well for more positive earnings comparisons: Orders were up 13 percent.

That translates into more revenue and more profits during the fourth quarter and possibly the first quarter of next year, because homebuilders don't get their money until a buyer closes on a deal to buy a house. That can take anywhere from several weeks to several months while the home is built and the buyer lines up a mortgage and tends to other details.

Ryland said that high profits from its financial services operations were the driving force behind its first positive quarterly earnings comparison of 1991, but the company said that it also got a modest boost from improving homebuilding markets.

"The homebuilding recovery has been slowed by the weakness in consumer confidence, restrictions in the capital markets, and the lingering recession, which influences spending patterns in many parts of the country," Ryland Chairman Roger W. Schipke said in a statement. "Although we anticipate some difficulties continuing into 1992, Ryland [should] . . . achieve further gains as the economic recovery takes hold."

Ryland said the conspicuous exception to recovering housing markets has been in California, where high housing prices have scared consumers out of buying bigger homes. Ryland said that it will be building less expensive homes in California to appeal to first-time buyers.

Three months ended 9/30/91

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

'91 343,141,000 6,881,000..0.45

'90 334,100,000 5,751,000..0.38

% change .. +2.7. +19.6 .. .. +18.4

Nine months ended 9/30/91

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

'91 870,460,000 7,757,000..0.44

'90 977,040,000 17,910,000.1.18

% change ..-10.9. -56.7 .. .. -62.7

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