JACKSONVILLE, FL-Like others in the residential real estate market, the locally based St. Joe Co. faced challenges in the past year, said company officials during a Q4 earnings call Tuesday.

The company reported net income of $23.8 million, or 32 cents per share, for the fourth quarter. This compares with $37.2 million, or 49 cents per share, for Q4 2005. Net income for the full year 2006 was $52.5 million, or 71 cents per share, compared with $126.6 million, or $1.66 per share, in 2005. Included in the full-year results are charges of $13.4 million pretax, or 11 cents per share after tax related to the company's exit from the homebuilding business in Florida and the corporate reorganization announced last August.

In the third quarter, the company announced organizational changes to meet future strategic needs and, as the company continued to reassess its long-term plans, more adjustments were required. Among strategic changes the company has made was the decision in January to hire Atlanta-based Eastdil Secured to sell its 17-building, 2.3 million-sf office portfolio.

"The challenge has been to react accordingly to what we believe has been a cyclical downturn in the marketplace," St. Joe Co. chairman and CEO Peter Rummell said during the earnings call.

Among bright spots for the year has been the interest commercial developers have shown in Northwest Florida. "National and regional retail developers have discovered Northwest Florida and are expressing a high level of interest in the region," Rummel says.

As it looks to the future, the company will focus on its core competencies by, among other initiatives, seek new strategic alliances with homebuilders. "By most any measure, the company has been quite successful over the last decade," Rummel says. "But, what we did to be successful in our first 10 years would not produce the same success for our next 10. The realization of our potential in the decade ahead requires a shift in strategy and tactics."