swung to a first-quarter loss, as expected, and the homebuilder also said it would not meet its prior earnings guidance for the year because of uncertainty in the U.S. housing market.
Ryland posted a loss of $24.4 million, or 58 cents a share, for the first quarter, compared with a year-earlier profit of $90 million, or $1.86 a share.
The results were in line with Ryland's
pre-announcement earlier this month, when the company estimated a loss of 50 cents to 60 cents for the quarter. Analysts expected a loss of 47 cents a share, according to Thomson Financial.
The results were dragged down by rapidly falling gross margins, which have been slammed by declining housing prices that are forcing Ryland and other homebuilders to write down the value of their land holdings.
In the first quarter, Ryland recorded land write-offs and writedowns totaling $65.5 million, which the company had already pre-announced. Gross margins for the period tumbled to 9.2% from 24.4% a year earlier. Excluding the land valuation charges, gross margins totaled 18.7%.
Total revenue dropped 34% to $706.4 million as home closings slowed. New orders, a key predictor of future revenues, fell nearly 26% to 2,989 units.
Ryland also recorded a $15.4 million charge for a goodwill impairment, likely related to a past acquisition.
Citing the "uncertainty of current market conditions," the company said it does not expect to meet its prior earnings guidance for 2007, but did not offer a new forecast.
"The company is maintaining focus on its liquidity and balance sheet while optimizing its earnings performance," Ryland said.
Ryland's previous projection was for 2007 earnings per share of $3.75 to $4.25. Analysts, on average, currently expect earnings of $1.95 a share, according Thomson Financial.