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California

William Lyon Homes Profit Nearly Doubles

The builder cites a large land sale in the Inland Empire and strong demand for housing.

August 13, 2003|Bonnie Harris | Times Staff Writer

William Lyon Homes Inc. said Tuesday that its second-quarter profit nearly doubled as the Newport Beach-based builder benefited from a large land sale in the Inland Empire and took in a record number of new-home orders.

The company, which sells homes in California, Arizona and Nevada, reported net income of $13.8 million, or $1.38 a share, for the three months ended June 30. That compares with net income of $7 million, or 66 cents a share, a year earlier.

Revenue rose 8% on a year-over-year basis to $209.7 million.

William Lyon is Southern California's ninth-largest home builder, based on its delivery of 769 homes in the region during the first six months of this year, according to the Meyers Group, an industry research firm in Costa Mesa.

Like other home builders, William Lyon has been riding the wave of rising demand for homes -- particularly in California -- and strong growth in real estate prices. The recent spike in mortgage rates has raised some concern among analysts about a slowdown in the housing market, but so far, there have been few indications of a significant effect on home builders.

During the second quarter, William Lyon said new orders rose 23% to 948 homes from 768 a year earlier, bolstered by the opening of 16 sales offices since September. William Lyon plans to open 15 new communities over the next six months; as of June 30 it owned or controlled about 14,500 lots.

"The number of new orders during the quarter is a record for any quarter in the company's history," Chief Executive William Lyon said. The backlog of homes sold was up 18% to 1,507 homes, also a new high for the company, Lyon said.

The builder's selling price rose during the second quarter in all three states in which the company operates. In California, the average sale price jumped 25% on a year-over-year basis to $493,900. The average price in Arizona rose 6% to $230,000, and in Nevada it shot up 26% to $306,000.

William Lyon's latest earnings also were lifted by the sale of land.

Wade Cable, chief operating officer, said Tuesday that the company had purchased a large piece of land in the Inland Empire in the first quarter. One-third of that -- or about 100 lots -- was in turn sold to Irvine-based home builder Standard Pacific Corp. That resulted in a gross profit of about $6.2 million.

Shares of William Lyon hit a 52-week high of $36.49 during trading Tuesday, before closing up 9 cents at $36.30 on the New York Stock Exchange.

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