The St. Joe Company (JOE) reported second-quarter 2014 earnings per share of 16 cents, thanks to the sale of the RiverTown community. The company had earned 3 cents per share in the year-ago quarter. The Zacks Consensus Estimate, excluding one-time items, was earnings of one cent per share.
St. Joe’s total revenue for the quarter came in at $68.2 million, with the RiverTown sale, accounting for $43.6 million. The company had reaped revenues of $33.8 million in the year ago quarter.
Quarter in Detail
Real Estate sales revenue jumped to $48.9 million from $7.0 million reported in the prior-year quarter. The substantial increase was driven by Residential Real Estate revenue that soared to $47.8 million from $5.5 million in the year-ago period. Most of the revenue surge was a result of the RiverTown sale.
In the Resorts, leisure and leasing segment, revenue rose 7.1% year over year to $18.2 million. The uptick was driven by incremental resorts and leisure revenues mainly attributable to a rise in room nights rented as well as additional leasing revenue from leases in the Pier Park North joint venture.
On the flip side, revenue from timber sales plunged to $1.1 million in the quarter under review from $9.8 million reaped in the year-ago quarter. The decline was propelled by the AgReserves sale closed in Mar 2014. Tons delivered fell to less than 60,000 from 340,000 recorded in the year-ago comparable period.
As of Jun 30, 2014, St. Joe’s cash, cash equivalents and investments amounted to $679.4 million, significantly up from $168.9 million as of Dec 31, 2013.
RiverTown Community Sale
During the second quarter, St. Joe accomplished the sale of RiverTown community for $24.0 million in cash and $19.6 million in form of a purchase money note. Moreover, it included an assumption of the company's Rivers Edge Community Development District obligations.
Also, as part of the sale deal, the buyer agreed to acquire certain RiverTown community associated impact fee credits from the company over a five-year period. The estimated value of the impact fee credits, majority of which is expected to be acknowledged at the end of the five-year period, is $20 to $26 million.
St. Joe is presently focused on enhancing its resort-based operations, which augur well going forward. Also, the recent sales are a strategic fit which provide the company with substantial liquidity to be deployed for development needs. Yet, decline in timber sales remains a concern.
St. Joe currently has a Zacks Rank #3 (Hold). Investors interested in the real estate industry may consider other stocks like Alexander & Baldwin, Inc. (ALEX), AV Homes, Inc. (AVHI) and Brookfield Canada Office Properties (BOXC). While Alexander & Baldwin has a Zacks Rank #1 (Strong Buy), AV Homes and Brookfield Canada Office Properties carry a Zacks Rank #2 (Buy).
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