Newport Beach-based William Lyon Homes Inc. on Thursday reported a 72% decline in third-quarter profits, the latest local homebuilder to feel the effects of a cooling housing market.
Net income for the quarter was $10.5 million, down from $38 million a year earlier. Revenue fell 17% to $311 million.
The sluggish results came in the same quarter that the homebuilder finally was taken private by the company’s chairman and chief executive, William Lyon.
Lyon and his trusts completed the privatization in late July, buying the rest of the company for $275 million. The deal valued the homebuilder at about $940 million.
Orders for new homes fell 40% to 501 homes in the third quarter, even though the average number of sales locations was up 31% to 55 housing developments.
The company sells in California, Arizona and Nevada. Softening has continued through the year in many of its markets, resulting in slowing new home orders, increases in cancellation rates and increasing pricing pressures from competitors, the company said.
Buyers backed out of 39% of the contracts made during the latest quarter, compared to 15% a year ago.
The company also said it took an impairment loss on real estate assets of $14 million for the third quarter, due to slower than anticipated home sales and lower than anticipated net revenues.
