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St. Joe (JOE) Posts Loss in Q4, Witnesses Fall in Revenues

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The St. Joe Company (JOE - Free Report) reported a fourth-quarter 2018 net loss of $0.1 million or $0.00 per share compared with net income of $38.5 million, or 58 cents per share in the comparable period last year.

The reported quarter’s results include around $1.4 million in net expenses associated with Hurricane Michael that affected the area on Oct 10, 2018. Also the fourth-quarter 2018 results include around $3.7 million unrealized loss on the company’s preferred investments due to market volatility in December 2018.

Meanwhile, the year-ago quarter results included a net gain of $9.8 million resulting from the sale of its short-term vacation rental management business. Also, results included a one-time credit of $33.5 million to re-measure the company’s net deferred tax liability.

Total revenues for the quarter came in at $16.3 million, down 25.2% from $21.8 million recorded a year ago. Results reflect decline in revenues in real estate, hospitality, leasing and timber segments. However, the company’s total expenses for the quarter declined 24.8% from the prior-year quarter to $17.6 million.

For full-year 2018, St. Joe reported net income of $32.4 million or 52 cents per share compared with net income of $59.5 million or 84 cents per share in 2017. Revenues aggregated $110.3 million, up 10.3% year over year.

Behind the Headline Numbers

In the fourth quarter, real-estate revenues came in at $6.1 million, down from the prior year’s $8.3 million, while Hospitality revenues fell to $6.7 million, down from $8.6 million in the year-ago period.

Leasing revenues came in at $3.2 million, slightly down from $3.5 million in the prior-year quarter, while timber revenues of $0.3 million declined from $1.4 million reported in the year-ago quarter.

Notably, as of Dec 31, 2018, the company owned a portfolio of approximately 812,630 square feet of rentable commercial space which was 93% leased. This compared to ownership of 813,602 square feet of rentable commercial space by the company which was 87% leased as of Dec 31, 2017. Moreover, in 2018, a total of 202 home sites were sold as compared with 174 in 2017.

Liquidity

St. Joe exited 2018 with cash, cash equivalents and investments of $240.3 million as of Dec 31, 2018, as compared to $303.4 million as of Dec 31, 2017.

Additionally, during 2018, the repurchased 5,238,566 shares of its common stock for $93.4 million, denoting approximately 8% of the company’s outstanding common stock. Following the quarter end, the company bought back an additional 471,500 shares of its common stock for $7.1 million. St. Joe has around $35.8 million in remaining repurchase authorization under its stock-repurchase program.

Conclusion

St. Joe’s strategies to expand its portfolio of income-producing properties and focus on recurring operating income opportunities will likely create long-term value for shareholders. Further, continued efforts to enhance its leasing portfolio have enabled the company to record encouraging growth. Nonetheless, inconsistent revenue performance in a number of segments and regional business concentration remain concerns.

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

We, now, look forward to the earnings releases of other real estate related companies Green Brick Partners, Inc. (GRBK - Free Report) , Senior Housing Properties Trust (SNH - Free Report) and Plymouth Industrial REIT, Inc. (PLYM - Free Report) , which are slated to report their quarterly numbers in the upcoming days.

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