Ryland Group earned $19.8 million in quarter

July 29, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

The Ryland Group Inc., despite improvements in its earnings in both the second quarter and first half, continued to feel the sting of sluggish home sales and competition during the first half of 1995.

The Columbia-based company reported net income of $19.8 million, or $1.22 per share, in the quarter ended June 30, more than doubling its performance of $7.6 million, or 45 cents per share, in the comparable 1994 period. Revenues totaled $389.2 million, down 5.23 percent.

In the first half of this year, Ryland generated net income of $20.4 million, or $1.23 per share, an increase of 48 percent and 52 percent, respectively, from the previous six-month period ended June 30. Revenues of $734.4 million were essentially unchanged.

The majority of its gains were attributed to Ryland's $47 million sale of its mortgage-backed securities unit to Norwest Bank Minnesota in the second quarter. That transaction produced a net gain of $19.5 million.

Without the gain, Ryland had a net loss from continuing operations of $922,000, or 9 cents per common share, in the second quarter and $2.4 million, or 22 cents per share, for the first six months. Those results compared to net income of $6 million, or 35 cents per share, and $8.8 million, or 49 cents per share, for the previous year's first half.

The numbers were down largely because of continued competitive pressures in its homebuilding segment, which has hurt the industry over the past year. Ryland, the nation's third-largest homebuilder, suffered a pre-tax loss of $4.7 million in the second quarter and an $8.9 million pre-tax loss for the first six months.

Those results compared to second-quarter 1994 pre-tax earnings $4.7 million, and six month 1994 pre-tax income of $4.1 million.

"The results were consistent with our expectations," said Michael Mangan, a Ryland executive vice president and its chief financial officer. "Although we're never going to be satisfied not making money in homebuilding, we think we're in a much better position now -- especially in terms of inventory -- for the second half of 1995."

Overall, Ryland closed 4,216 homes in the first half of 1995 with an average price of $160,000, a 2 percent rise vs. the year before. New orders were flat as well, with 5,178 as of June 30. Outstanding contracts slipped 6.3 percent for the six months, to 3,515 homes, with a value of $602.8 million.

Ryland's financial services division also reported lower earnings for the second quarter and first half, with net income of $6.3 million and $11.8 million, respectively. Those figures were down 36 percent and 39 percent, respectively, because of reduced loan originations, lower gains from sales of mortgage servicing rights and lowered income from investment operations.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.