Irvine-based homebuilder Standard Pacific Corp. last week posted a worse-than-expected loss of $119.7 million for the third quarter, but said it was taking steps to cut its heavy debt.
Analysts were expecting a loss closer to $100 million. The company made a profit of $30.8 million a year earlier. The loss included $223.5 million of charges, including for diminishing land values.
The company saw revenue of $675 million, down 19% from a year earlier. The figure includes $57 million in land sales.
Home deliveries, or closing of contracts to buy a home, fell 25% for the quarter. New orders for homes rose 23%.
“High levels of unsold new and existing homes, decreasing home prices, tenuous homebuyer confidence and further erosion of mortgage credit liquidity during the quarter combined to undermine any stability within the markets,” Chief Executive Stephen Scarborough said.
The company has cut homebuilding debt by more than $265 million during the past year, and plans to generate cash next year, he said.
Shares of Standard Pacific have lost more than 80% its value this year. The company counts a market value of about $340 million.
Some analysts fear the worst for the country’s 11th largest homebuilder by sales. CreditSights analysts Frank Lee and Sarah Rowin said Standard Pacific could be forced to file for bankruptcy protection.
Other analysts have been more optimistic, saying the builder has the capacity to pay down its revolving debt, assuming it’s able to sell off land it holds.
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Mark Mueller
