Standard Pacific Boosts Profit 43%

Strong demand for its houses in California and other hot real estate markets helped boost Standard Pacific Corp.’s quarterly profit 43%, but the Irvine home builder’s stock fell after it reported that new-home orders were down 25% so far in July.

The company blamed the slide in orders on low supplies of houses available for sale; soaring prices, particularly in Orange County; and a tough comparison to last July, when orders soared 88% from the previous year. The company also has “intentionally slowed” the release of new homes in Phoenix by raising prices as it works through a large backlog of completed homes there.

“It’s hard to read a lot into a four-week period,” Chief Financial Officer Andrew Parnes said of the July numbers.

Still, the monthly order number “is something of a yellow flag,” said A.G. Edwards analyst Gregory Gieber, who maintained a “buy” rating on the stock. A decline in year-over-year orders could signal slower revenue growth.

Shares of Standard Pacific closed down 88 cents Thursday at $46.37 on the New York Stock Exchange.

For the second quarter ended June 30, Standard Pacific, the nation’s 11th-largest home builder, reported net income of $60 million, or $1.72 a share, compared with $42 million, or $1.26, a year earlier.

The period included a $6.4-million charge related to the retirement of debt. The results exceeded analyst expectations of $1.42 a share, according to Thomson First Call.

Revenue rose 49% to $769.3 million. The company attributed the increase to an 18% rise in deliveries and a 30% jump in its average home price to $382,000.

“We continue to benefit from our strong position in three of the country’s strongest markets -- California, Florida and Arizona,” Chief Executive Stephen Scarborough said. The three regions generated 80% of the company’s home sales.

In California, the average price of a Standard Pacific home rose 24% to $634,000. The price increased 26% to $233,000 in Florida and was up 4% in Arizona to $192,000. The company saw weaker results in Texas and Colorado, where the housing markets are softer.

New orders for the quarter increased 24% to a record 3,215, the company said.

Because of the strong numbers, the company raised its guidance for the full year, Scarborough said. It now expects to earn $8.60 to $8.70 a share, up from its previous forecast of $7.55 to $7.65.

For the third quarter, Standard Pacific offered initial guidance of $1.90 to $1.95 a share.