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Catellus Profit Falls 49% on Decrease in Property Sales

October 31, 2002|Roger Vincent | Times Staff Writer

Catellus Development Corp., one of California's largest landowners and builders, said Wednesday that third-quarter profit fell 49% from a year earlier as property sales decreased.

San Francisco-based Catellus made $14.7 million, or 16 cents a share, compared with $28.6 million, or 28 cents, a year earlier.

The profit decline was expected because the company intentionally accelerated sales during the first half of the year.

"They made a decision to push sales into the first half of 2002," said Jim Sullivan, an analyst at Green Street Advisors. "Real estate prices were at high levels and the fundamentals were declining. It was a wise choice."

Catellus reported $10.3 million in sales of buildings and land in the quarter, down from $64.3 million the year before. Revenue from Catellus' rental properties rose 13%, to $66 million.

Income from property sales and fee services in the fourth quarter are expected to be about the same as the third quarter, said Catellus Chairman Nelson Rising. The firm expects earnings per share to grow 15% this year, to $2, depending on the timing of sales.

Catellus, the former real estate division of Santa Fe Pacific Railroad, owns 36.5 million square feet of rental properties and has one of the largest supplies of undeveloped land in the Western U.S., capable of supporting more than 39 million square feet of commercial development and 10,400 residential lots and units. It also owns Union Station in Los Angeles.

Most of the land sales this year have been residential sites the company owns in southeast Orange County, suburban Sacramento and the Bay Area, Rising said.

Catellus shares rose 15 cents Wednesday to $17.40 on the New York Stock Exchange. The firm announced its earnings after the markets closed.

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Bloomberg News was used in compiling this report.

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