Back to top

Analyst Blog

The St. Joe Company (JOE - Free Report) reported third-quarter 2016 net income per share of 4 cents, which surpassed the Zacks Consensus Estimate of 2 cents and came ahead of the year-ago quarter tally of 3 cents. Lower expenses contributed to this beat.

However, total revenue for the quarter came in at $27.2 million against $27.8 million in the prior-year period. Decline in real estate revenue as well as timber revenue mainly pulled down the top-line figure, though the negative was partly offset by an uptick in resorts and leisure revenue and in leasing revenue.

Nevertheless, the company’s operating and corporate expenses declined by $4.7 million, or 47% from a year ago and reflected a reduction in employee-related costs and professional fees. In fact, total expenses for the quarter fell 15.2% from a year ago to $25.6 million.

Quarter in Detail

In third-quarter 2016, real estate revenue fell 14.3% to $4.2 million from a year ago. Results included $3.1 million in residential real estate revenue, $0.6 million in commercial real estate revenue and $0.5 million in other revenue. Timber sales also plummeted 31.6% year over year to $1.3 million.

However, the company reported a 2.7% increase in resorts and leisure revenues to $19.0 million. Increased average room rates at both the WaterColor Inn and in the vacation rental program plus the rise in membership revenue from the St. Joe Club & Resorts private membership club helped the segment’s results to improve.

Moreover, leasing revenues grew 8.0% to $2.7 million. The company had around 517,000 square feet of retail, industrial and commercial space leased as of Sep 30, 2016.

Finally, St. Joe exited the third quarter with cash, cash equivalents and investments of $402.0 million, up from $399.8 million as of Jun 30, 2016.

Our Viewpoint
 
St. Joe makes concerted efforts to enhance its resorts, leisure business and leasing operations. We believe that such efforts would aid in boosting its profitability going forward. Sale of non-strategic assets also provides it with substantial liquidity for developmental needs. However, volatility in sales revenues at a few segments and regional business concentration increases its risk.

ST JOE CO Price, Consensus and EPS Surprise

 

ST JOE CO Price, Consensus and EPS Surprise | ST JOE CO Quote

St. Joe currently has a Zacks Rank #2 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the real estate industry may consider stocks like Forestar Group Inc. (FOR - Free Report) , RE/MAX Holdings, Inc. (RMAX - Free Report) and Mitsubishi Estate Co., Ltd. (MITEY - Free Report) . Each of these stocks carries the same Zacks Rank as St. Joe.


Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>