Levitt's Q3 Earnings Drop as Focus Turns to Strengthening Infrastructure

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FORT LAUDERDALE, FL-Locally based Levitt Corp.’s third-quarter net income dropped to $10.7 million, down from $13.7 million in the same quarter a year ago. Revenue in the most recent quarter fell to $111.6 million, down from $113.6 million for the comparable 2004 quarter. During a conference call, Alan B. Levan, chairman and CEO, characterized the performance this quarter, as he did at mid-year, as predictable as “we continued to implement our strategy of developing a scaleable national platform capable of delivering three to four times current levels in the next five years.

“After several years of growing at a compound annual rate of almost 100%…we recognized the considerable strain placed on our existing platform and the need to implement several initiatives to strengthen our core business and improve overall operating efficiency.” Among the initiatives are improving land acquisition, production, quality control and purchasing processes along with upgrading the company’s technology infrastructure. He characterized this as a “transitional year resulting in ‘flatish’ earnings.”

New orders declined 32% to 243 units in third quarter, compared with 534 units in the same quarter of 2004. Levan attributed the decrease to the timing of the release of inventory, “not a reflection of market demand.” Consumer demand is strengthening he said, particularly in Florida where the average selling price for new orders in third-quarter 2005 rose 39% to $340,000, up from $244,000 at the same time a year ago.