Wednesday, October 18, 2006

ryland / where are the writedowns ? wo bleiben die abschreibungen

keine warnung ? bedeuted leider nicht das die zahlen gut sind.
no warning ? doesn´t mean the numbers are great.... highlights

New order units in the third quarter of 2006 decreased 45.6 percent to 2,372 units from 4,361 units in the third quarter of 2005; (orders in the west doqn 67%!)

Decrease in effective tax rate from 37.5 percent to 33.3 percent in the third quarter of 2006 generated a $0.12 per share benefit;

For the third quarter of 2006, new order dollars decreased 49.4 percent to $673.2 million from $1,329.3 million in the third quarter of 2005. New orders of 2,372 units for the quarter ended September 30, 2006, represented a decrease of 45.6 percent, compared to new orders of 4,361 units for the same period in 2005.

The dollar value of the Company's backlog at September 30, 2006, was $2.1 billion, a decrease of 33.5 percent from September 30, 2005. Backlog units at the end of the third quarter of 2006 decreased 35.3 percent to 6,835 from 10,563 at the end of the third quarter of 2005.

Shares of the Company's common stock repurchased during the third quarter of 2006 totaled 1,850,000, or 4.2 percent of its weighted-average shares outstanding.

The Company repurchased 1,850,000 shares of its common stock during the third quarter of 2006 at a cost of $75.1 million (40,50$). For the nine months ended September 30, 2006, the Company repurchased 4,700,000 shares of its common stock at a cost of $250.1 million (53$) . Outstanding shares at September 30, 2006, were 42,521,860, versus 46,659,446 for September 30, 2005, a decrease of 8.9 percent. At September 30, 2006, the Company had authorization from its Board of Directors to purchase approximately $26.6 million of additional shares.
stock after hours in thin trading 46.30 +2,64 (6.05%)

because of the not identical time period the numbers gives you no apples to apples comparisson but the trend is really obvious

30.09.06 31.12.05

cash and cash equivalantes $89.257 $ 461.383
total inventories $3.072.241 $2.579.667
debt $1.178.959 $ 921.970

plenty of money to buy back more shares............ they have to find a way to beat the eps number :-)

the one thing that i´m missing and the reason why ryland has not to lower their numbers is the non existend writedowns

land under development and improved lots $ 1.370.797 vs $1.087.016

mhhhh, with over 300 mio added in land in the year 2006 and

writedowns from all competitors like nvr "by land deposit impairments of approximately $80,800,000. "

and lennar "of $15.8 million of write-offs of deposits and pre- acquisition costs related to land under option that the Company does not intend to purchase and $11.8 million of inventory valuation adjustments"
just to name a few from the last days.

to put it mildly "not conservative"........

update conference call:

canrate 43%!
67000 lots 50% owned/50 optioned
lots locatet 12k california, 25k southeast, 16,5k north, 13,5k texas
debt to capital ratio 46% target year end 40%
bookvalue 32,50$
little exposure to joint ventures , only 13,5 mio$
not chasing volume like other builders
bought almost no land in washington dc in 2005+2006
san diego ugly, fort myers and naples floodes with speculaters
1950 spec houses / 50% under construction and 50% already build
landprices have to come down at least to 2004 levels before ryl will buy more (depends on region)
7.5 mio$ from landsales in the quarter. 7.2 mio$ from a flip on land in sacramento
writedown not imminent! when no recovery in 2007 the strategie not to chase volume will lead to bigger writedowns for sure . (good luck)!


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