New orders up 45% at Standard Pacific
Standard Pacific, one of the nation’s largest home builders, reported revenues of $274.9, a 35% rise over revenues of $204.2 million for the 2011 second quarter. This was due primarily due to a 34% increase in new home deliveries (excluding joint ventures) to 815 homes, the company said.
The increase in new home deliveries was driven by a 55% increase in the number of homes in backlog at the beginning of the quarter as compared with the prior-year period, and a 13% increase in speculative homes sold and delivered during the quarter to 285 homes, compared with 253 homes a year ago. The backlog of 1,266 homes was up 62%.
Net income for the quarter, which ended June 30, was $14.3 million, compared with a net loss of $10.5 million during the same quarter in 2011.
New orders were up 45% in the second quarter compared with the same quarter a year ago.
CEO and president Scott Stowell commented: "We are pleased that the positive momentum we experienced during the first quarter of 2012 continued into the second quarter. We earned $14.3 million, with deliveries up 34%, revenues up 35%, orders up 45% and homes in backlog up 62% over the prior-year period. Our solid second-quarter results reflect the execution of our strategy and continued improvement in housing market conditions during the quarter."
The Irvine, Calif.-based company purchased $96.6 million of land (2,238 home sites) during the 2012 second quarter. Approximately 36% of land purchases (based on land value) were located in California and 32% in Florida, with the balance spread throughout the company’s other operations. As of June 30, 2012, the company owned or controlled 27,757 homesites, of which 14,966 owned home sites are actively selling or under development. The home sites owned that are actively selling or under development represent a 5.1-year supply based on the company’s deliveries for the trailing 12 months ended June 30, 2012.
Standard Pacific operates in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas and Colorado.
Profits narrow at Owens Corning
Owens Corning reported net sales of $1.39 billion for the second quarter of 2012, a 4.1% decrease from sales of $1.45 billion during the same period last year.
Net income for the second quarter, which ended June 30, was $39 million, compared with $78 million during the same period of 2011.
Net sales in insulation rose from $326 million in the second quarter of 2011 to $340 million in the second quarter of this year. Roofing revenue decreased however. Net sales in the second quarter 2012 were $605 million, compared with $645 million a year ago.
"Our second-quarter financial performance represents progress over the first quarter, but the rate of improvement is below our expectations, and we no longer see 2012 as a year of adjusted EBIT growth," said chairman and CEO Mike Thaman. "However, we continue to expect that the second half of the year will be more profitable than the first and that we will deliver strong free cash flow in 2012.
"Roofing profits remained strong, but compared negatively with the second quarter of last year due to continued high asphalt costs and competitive pressure in the marketplace," he added. "Insulation demonstrated excellent operating leverage and significantly narrowed its losses. In addition, our composites business made good progress in the repositioning of our European assets, the reduction of inventories and the start-up of the new melter in Mexico."
In the building materials segment, the company expects another year of strong financial performance in roofing, but with lower margins based on the current outlook for volumes, asphalt costs and pricing. The company continues to believe insulation will improve financial performance in the second half of the year and significantly narrow losses in 2012 on improved U.S. housing starts.
Brighter picture on housing from Case-Shiller
Home prices across the nation rose for the second month in a row, according to the S&P/Case Shiller Index, a closely watched indicator for the housing market. The average price of single-family, residential homes in the United States increased by 2.2% in May 2012 compared with the previous month for both the 10- and 20-city composites. On an annual basis, both composites and 17 of the 20 MSAs saw increases in May compared with April 2011. The exceptions were Boston, Charlotte and Detroit.
Taking the longer view, average home prices across the United States in May 2012 are back to their spring 2003 levels for the 20-city composite and summer 2003 levels for the 10-city composite.
“We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “However, we need to remember that spring and early summer are seasonally strong buying months, so this trend must continue throughout the summer and into the fall.”
Phoenix posted the best annual return again this month. Average home prices in that region were up 11.5% versus May 2011. Although prices are still more than 50% below their June 2006 peak, the past five months have been positive for that market, according to the report. Las Vegas posted a positive monthly change in May and saw an improvement in its annual return. But the market is still more than 60% below its August 2006 peak.