St. Joe (JOE) Q1 Earnings Slip Year Over Year, Stock Down

The St. Joe Company (NYSE:JOE) reported first-quarter 2018 net income per share of one cent compared with six cents, recorded in the prior-year quarter. However, the prior-year quarter’s net income included a benefit of $3.5 million from an insurance settlement and net realized gains of $3.1 million from the sale of investments. Excluding other items, operating loss for the first quarter of 2018 improved by about $4.1 million.

Total revenues for the quarter came in at $19.9 million compared with $13.5 million, recorded in the year-ago period. This upswing was driven by higher leasing revenues, timber revenues and real-estate revenues.
However, the quarter witnessed a slight decline in the resorts and leisure business revenues.

The company’s total expenses for the quarter escalated 12.7% from the prior-year quarter to $20.4 million.

Shares of St. Joe declined 0.4% to $16.80 during the regular trading session on Apr 26.

Behind the Headline Numbers

In the reported quarter, real-estate revenues came in at $7.7 million, up from $1.5 million recorded in the comparable period last year. Timber revenues were $1.7 million, increasing from $1.3 million recorded in the prior-year quarter.

Further, leasing revenues for the first quarter came in at $3 million, up from the year-ago quarter’s figure of $2.6 million. St. Joe owned around 813,000 square feet of rentable commercial space, which was 89% leased as of Mar 31, 2018.

Nevertheless, resorts and leisure revenues came in at $7.5 million in the reported quarter, down from $8.1 million posted in the year-ago period.

Liquidity

St. Joe exited first-quarter 2018 with cash, cash equivalents and investments of $293.9 million, down from $303.4 million as of Dec 31, 2017.

In Conclusion

St. Joe’s strategy to expand resorts and leisure businesses bodes well for long-term growth. Such efforts, to achieve an optimal portfolio mix, will likely help the company bolster revenues and provide a more stable source of earnings. Further, its continued efforts to enhance its leasing portfolio enabled it to record encouraging growth in this segment.

Nonetheless, inconsistent revenue performance in a number of segments renders volatility to the company’s top line. Further, regional business concentration remains a concern.

St. Joe Company (The) Price, Consensus and EPS Surprise

St. Joe currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to earnings releases of other REITs like Alexandria Real Estate Equities, Inc. (NYSE:ARE) , Essex Property Trust Inc. (NYSE:ESS) and Regency Centers Corp. (NYSE:REG) . Alexandria and Regency Centers are scheduled to release results on Apr 30 while Essex Property is slated to report numbers on May 2.

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