Stratus Properties Inc (STRS) Faces Net Loss in Q3 2023 Despite Strong Cash Position and Share ...
Stratus Properties Inc (NASDAQ:STRS) reported a net loss of $2.8 million in Q3 2023, a slight increase from the $2.4 million net loss in Q3 2022.
The company's total stockholders equity stood at $192.0 million as of September 30, 2023, reflecting gains from the sale of Block 21 in 2022.
Stratus completed a $10.0 million share repurchase program and announced a new $5.0 million share repurchase authorization.
EBITDA for Q3 2023 was $(1.9) million, compared to $(1.2) million in Q3 2022.
On November 14, 2023, Stratus Properties Inc (NASDAQ:STRS), a diversified real estate company operating primarily in the Austin, Texas area, released its 8-K filing, disclosing its financial results for the third quarter of 2023. The company reported a net loss attributable to common stockholders of $2.8 million, or $0.35 per diluted share, compared to a net loss of $2.4 million, or $0.29 per diluted share, in the same period last year. The net loss for the first nine months of 2023 totaled $13.9 million, a significant shift from the net income of $96.5 million reported in the same period of 2022.
Financial Highlights and Challenges
Stratus Properties Inc (NASDAQ:STRS) experienced a decrease in net income, primarily due to the absence of property sales in the third quarter of 2023, which contrasted with $6.9 million of undeveloped property sales in the third quarter of 2022. However, the company's leasing operations segment saw an increase in revenue, mainly from Magnolia Place and The Saint June, which had no rental revenue in the third quarter of 2022, as well as increased revenue at Kingwood Place and West Killeen Market.
The company's total stockholders equity increased from $158.1 million at the end of 2021 to $192.0 million as of September 30, 2023. This increase is attributed to the gain realized from the sale of Block 21 in 2022, despite a special dividend payout of approximately $40 million and share repurchases totaling approximately $9.9 million in 2022 and through September 30, 2023.
Strategic Financial Management
Stratus Properties Inc (NASDAQ:STRS) has maintained a strong cash position with $35.2 million in cash and cash equivalents as of September 30, 2023, and no amounts drawn on its revolving credit facility. The company's debt increased to $156.1 million, primarily due to draws on project construction loans. Capital expenditures and purchases and development of real estate properties totaled $70.9 million for the first nine months of 2023, reflecting ongoing development projects.
William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, commented on the company's strategic approach amidst challenging macroeconomic conditions, stating,
We continue to focus on controlling costs and advancing development plans to be positioned for a market rebound. Longer term, we believe our excellent portfolio and experienced team will produce additional value for Stratus shareholders."
Operational Developments and Share Repurchase Program
Operational highlights include the completion of construction at The Saint June, with over 25 percent of the units leased at rents above initial projections. Stratus also continues construction on The Saint George, the last ten Amarra Villas homes, and Holden Hills. Following the completion of its $10.0 million share repurchase program, the Board authorized a new $5.0 million share repurchase program, reflecting confidence in the company's business and strong cash position.
Outlook and Cautionary Statement
Despite the reported net loss, Stratus Properties Inc (NASDAQ:STRS) remains optimistic about its long-term prospects, driven by its portfolio and experienced team. The company's forward-looking statements indicate a focus on strategic development and cost control to navigate the current economic landscape. However, Stratus cautions that its actual results may differ materially from those anticipated due to various factors, including market conditions, operating and construction costs, and financing terms.
Investors are encouraged to review the full financial statements and consider the company's potential in the context of the broader real estate market and economic conditions.
Explore the complete 8-K earnings release (here) from Stratus Properties Inc for further details.
This article first appeared on GuruFocus.
