IRVINE, Calif. (

TheStreet

) -- Homebuilder

Standard Pacific

(SPF)

reported earnings after the market close on Wednesday. Standard Pacific was the second homebuilder of the day to report a profit, after

M/I Homes

(MHO) - Get Report

reported a profit on Wednesday morning.

M/I Homes finished Wednesday up close to 7%, whereas Standard Pacific was down more than 3% in after-hours trading on Wednesday.

Prior to that, Standard Pacific ended regular trading on Wednesday before the release of its earnings down by 0.5%, on more than double its average trading level -- 3.8 million shares traded versus an average daily volume of 1.5 million.

Standard Pacific beat analyst expectations with an earnings per share of 31 cents in the fourth quarter, but -- as was the case with all of the homebuilder profits so far in the fourth quarter -- a one-time tax benefit was the driver of profits. Standard Pacific's net income in the fourth quarter was $82 million, and that included a tax benefit of $94 million. Analysts had been expecting an earning per share of two cents in the fourth quarter from Standard Pacific.

M/I Homes, on the other hand, would have turned a small profit even if it had not taken the tax benefit.

D.R. Horton

(DHI) - Get Report

and

Lennar

(LEN) - Get Report

were the other homebuilders that would have booked profits even without the one-time tax benefit.

TheStreet Recommends

D.R. Horton surged on Tuesday, and sparked a rally among the entire homebuilding sector, after its earnings outperformance.

The upshot, then, is this: Operating data is key to the outlook on homebuilders, and Standard Pacific's operating performance in the fourth quarter sent the market mixed signals. Standard Pacific's gross margins improved to 20.3%, from 18.6% in the third quarter, and its average sales price improved by 5%. However, Standard Pacific's net orders grew by only 1%, and its level of cancellations spiked to 21%, from 15% in the third quarter.

Likewise, the best homebuilder outperformers in this earnings season have not only booked one-time tax based profits, but have outperformed on the operating data, bringing net orders up while cancelations go down.

James Wilson, director of research at JMP Securities, said overall he read the Standard Pacific results as positive, other than the order numbers. What's more, Wilson pointed out that the order shortfall from Standard Pacific was tied to a much lower community count, which will be an important point of discussion in Thursday's conference call.

Standard Pacific's community count was down 40%, so its same-store orders were actually up 40%. Wilson said he had actually underestimated the level of the drop in communities -- it had been 29% in the third quarter. For comparison purposes, D.R. Horton showed a much better net order number than Standard Pacific, up 45%, but its communities were basically flat in the fourth quarter. In effect, same-store gains were similar for both D.R. Horton and Standard Pacific.

Wilson said the key question for Standard Pacific on Thursday will be how much community count can improve for 2010 since the homebuilder has been out actively buying new land.

Standard Pacific guided investors to profitability in 2010 in the earnings release.

Standard Pacific will host an earnings conference call on Thursday afternoon.

-- Reported by Eric Rosenbaum in New York.

RELATED STORIES:

>>Horton Delivers, But Not All Call a Buy

>>Builder Margin Stalls: Cause for Concern?

>>Lennar Bull Puzzled By Extent of Share Rise

>>See our new stock quote page.

Follow TheStreet.com on

Twitter

and become a fan on

Facebook.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.