The luxury builder reported earnings of $10.2 million, or 38 cents a share, an increase of 229 percent from a year ago.
Total revenues climbed to $150.2 million, an increase of more than 67 percent from $89.7 million in the same quarter a year ago.
WCI’s shares rose on the news, closing at $24.60 Wednesday, up $2.11, on the New York Stock Exchange.
The results beat Wall Streets expectations. Analysts on average expected earnings of 31 cents a share on revenues of about $145 million.
“Just over two years go, we laid out a vision, at the time of our IPO of a well capitalized homebuilder, with an attractive land position that would capitalize on the Florida housing market opportunity. While we still have a lot of work ahead of us, this quarter’s results are a reflection that we’ve maintained the course and have successfully carried out that vision to date,” said Keith Bass, WCI’s president and CEO, in a conference call with analysts Wednesday.
WCI has three divisions. Besides homebuilding, it also operates real estate brokerage and title businesses, and a resort amenity management business, overseeing its golf courses, country clubs and marinas.
In the third quarter, the company’s homebuilding revenues grew 93.1 percent over the year. Revenues in real estate services rose 9.2 percent and revenues from amenities increased by 6.8 percent.
Other quarterly highlights include:
- Revenues from delivered homes increased 91.2 percent to $119.3 million.
- Deliveries rose 76.7 percent to 258 homes.
- New orders grew 61 percent to 277 homes.
- Contract value for new orders was up 48.6 percent, at $124.8 million.
WCI’s home prices continue to rise, contributing to higher revenues. The average selling price for the completed homes it delivered to its buyers in the third quarter was $462,000, an increase of 8.2 percent from a year ago.
“We generated another impressive quarter with accelerating revenue, deliveries and new order growth,” Bass said.
New orders in the quarter included 12 condominiums in WCI’s new high-rise tower, Altaira, inside The Colony Golf & Bay Club community in Bonita Springs. The average selling price for those homes is more than $1.6 million, with one buyer claiming two penthouse units.
“In the fourth quarter we will continue to convert reservations and are now beginning to actively sell units, as we have started the initial site clearing and commencement of the building foundation,” Bass said.
As of the Sept. 30, the company owned or controlled 1,400 home sites throughout Florida. In Southwest Florida, its communities include Carrara at Talis Park, Livingston Lakes, Raffia Preserve, Artesia, LaMorada, Pelican Preserve and Hampton Park. The company caters to move-up, second-home and active adult buyers.
As a leading growth state, Florida continues to be a great market for homebuilders, Bass said.
He noted the state is gaining about 800 people a day, which is equivalent to adding a city bigger than Orlando every year.
“Importantly for WCI, a large portion of these people are in their 50s and 60s and right in the sweet spot of our target customer base and buyer profile,” Bass said. “The first baby boomers hit age 65 in 2011 and the last will reach 65 in 2029. This silver tsunami will see the age 65 and over population grow by 18 million people over the next 10 years and we believe Florida will be the ultimate first choice destination for many of them.”
In a research note, Buck Horne, an analyst with Raymond James, described WCI’s jump in new orders as impressive and pointed out that it now has roughly a nine year supply of lots after adding 1,000 in the third quarter. His team recently ranked WCI as the public builder with the highest-rated land positions in Florida.
“WCI’s core homebuilding gross margin remains near the top of the industry, as the company benefits from strong Florida demand and sustained pricing power,” Horne said.