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Stratus Swings to Q3 Loss on Weak Sales, One-Time Charges
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Shares of Stratus Properties Inc. (STRS - Free Report) have declined 0.6% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has declined 5.3% compared with the S&P 500’s 0.1% growth.
Stratus incurred a net loss of 62 cents per share for the third quarter of 2025, wider than a net loss of 5 cents per share in the year-ago period.
Revenues fell 44% to $5 million from $8.9 million in the third quarter of 2024. The decline was primarily due to the absence of real estate sales in the quarter, in contrast to the sale of an Amarra Villas home in the comparable period last year.
Stratus incurred a net loss attributable to common stockholders of $5 million, wider than a net loss of $0.4 million in the year-ago period.
Stratus Properties Inc. Price, Consensus and EPS Surprise
Stratus’ EBITDA turned negative, coming in at $5.5 million for the quarter versus a modest $0.01 million in the third quarter of 2024.
Real estate operations posted a segment loss of $4.5 million for the quarter compared with a $1.4 million loss in the prior-year quarter. The downturn was largely attributed to a $2.9 million impairment related to the termination of a potential development project.
Leasing operations, however, remained relatively stable. Revenue from this segment was flat at $4.9 million, and it produced a segment profit of $0.3 million, albeit down significantly from $3.3 million in the year-ago period. The decline in profitability was driven by higher depreciation and lower gains from asset sales.
Management Commentary
Chairman and CEO William H. Armstrong III acknowledged the company’s strategic repositioning efforts during a challenging quarter. “We are pleased to have entered into an agreement to sell Lantana Place – Retail for approximately $57.4 million, a favorable outcome that will allow us to repay the associated project loan and further strengthen our balance sheet,” Armstrong stated. He also noted the lease-up progress of The Saint George and development advances at Holden Hills Phase 1.
Armstrong emphasized the company’s focus on preserving a strong liquidity profile, noting a $55 million cash balance with no outstanding draws on the revolving credit facility as of Sept. 30, 2025. Stratus continues to evaluate options for deploying cash from recent transactions, including share repurchases, deleveraging and reinvestment in its project pipeline.
Factors Influencing the Headline Numbers
The primary driver of Stratus’ revenues and profit declines was the sharp falloff in property sales. The real estate operations segment generated only $0.05 million in revenue during the quarter, compared with $4 million in the prior year. In contrast, leasing revenues remained consistent but did not offset the drop in development activity.
Additionally, the termination of a potential development project led to a $2.9 million write-off of previously capitalized planning costs, significantly weighing on quarterly results. General and administrative expenses also rose to $3.9 million from $3.4 million, reflecting higher compensation and overhead costs.
Stratus also incurred $0.8 million in interest expenses and a small loss on debt extinguishment, further impacting the bottom line.
Other Developments
In October 2025, Stratus entered into an amended agreement to sell Lantana Place – Retail for approximately $57.4 million. The transaction, pending standard closing conditions, is expected to close in the fourth quarter. Proceeds will be used to repay a project loan with a principal balance of $29.8 million.
Through Nov. 7, 2025, the company repurchased 180,899 shares of its common stock at an average price of $21.59 per share, totaling $3.9 million. As of that date, $21.1 million remained available under the $25 million share repurchase authorization.
Earlier in 2025, Stratus also recorded a $5 million pre-tax gain from the sale of the West Killeen Market retail project and received $47.8 million from the formation of the Holden Hills Phase 2 partnership, both of which contributed to its robust cash position.
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Stratus Swings to Q3 Loss on Weak Sales, One-Time Charges
Shares of Stratus Properties Inc. (STRS - Free Report) have declined 0.6% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has declined 5.3% compared with the S&P 500’s 0.1% growth.
Stratus incurred a net loss of 62 cents per share for the third quarter of 2025, wider than a net loss of 5 cents per share in the year-ago period.
Revenues fell 44% to $5 million from $8.9 million in the third quarter of 2024. The decline was primarily due to the absence of real estate sales in the quarter, in contrast to the sale of an Amarra Villas home in the comparable period last year.
Stratus incurred a net loss attributable to common stockholders of $5 million, wider than a net loss of $0.4 million in the year-ago period.
Stratus Properties Inc. Price, Consensus and EPS Surprise
Stratus Properties Inc. price-consensus-eps-surprise-chart | Stratus Properties Inc. Quote
Other Key Business Metrics
Stratus’ EBITDA turned negative, coming in at $5.5 million for the quarter versus a modest $0.01 million in the third quarter of 2024.
Real estate operations posted a segment loss of $4.5 million for the quarter compared with a $1.4 million loss in the prior-year quarter. The downturn was largely attributed to a $2.9 million impairment related to the termination of a potential development project.
Leasing operations, however, remained relatively stable. Revenue from this segment was flat at $4.9 million, and it produced a segment profit of $0.3 million, albeit down significantly from $3.3 million in the year-ago period. The decline in profitability was driven by higher depreciation and lower gains from asset sales.
Management Commentary
Chairman and CEO William H. Armstrong III acknowledged the company’s strategic repositioning efforts during a challenging quarter. “We are pleased to have entered into an agreement to sell Lantana Place – Retail for approximately $57.4 million, a favorable outcome that will allow us to repay the associated project loan and further strengthen our balance sheet,” Armstrong stated. He also noted the lease-up progress of The Saint George and development advances at Holden Hills Phase 1.
Armstrong emphasized the company’s focus on preserving a strong liquidity profile, noting a $55 million cash balance with no outstanding draws on the revolving credit facility as of Sept. 30, 2025. Stratus continues to evaluate options for deploying cash from recent transactions, including share repurchases, deleveraging and reinvestment in its project pipeline.
Factors Influencing the Headline Numbers
The primary driver of Stratus’ revenues and profit declines was the sharp falloff in property sales. The real estate operations segment generated only $0.05 million in revenue during the quarter, compared with $4 million in the prior year. In contrast, leasing revenues remained consistent but did not offset the drop in development activity.
Additionally, the termination of a potential development project led to a $2.9 million write-off of previously capitalized planning costs, significantly weighing on quarterly results. General and administrative expenses also rose to $3.9 million from $3.4 million, reflecting higher compensation and overhead costs.
Stratus also incurred $0.8 million in interest expenses and a small loss on debt extinguishment, further impacting the bottom line.
Other Developments
In October 2025, Stratus entered into an amended agreement to sell Lantana Place – Retail for approximately $57.4 million. The transaction, pending standard closing conditions, is expected to close in the fourth quarter. Proceeds will be used to repay a project loan with a principal balance of $29.8 million.
Through Nov. 7, 2025, the company repurchased 180,899 shares of its common stock at an average price of $21.59 per share, totaling $3.9 million. As of that date, $21.1 million remained available under the $25 million share repurchase authorization.
Earlier in 2025, Stratus also recorded a $5 million pre-tax gain from the sale of the West Killeen Market retail project and received $47.8 million from the formation of the Holden Hills Phase 2 partnership, both of which contributed to its robust cash position.