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JACKSONVILLE, FL-Lagging sales in the St. Joe Co.’s existing residential resort business has pulled down first-quarter profits but the commercial and retail segments of Florida’s largest landowner remain strong, says company chairman and CEO Peter S. Rummell. The company plans to introduce a new primary residential product throughout the remainder of 2006.<pNet income for the first three months of this year total $3.7 million or five cents per diluted share, down 76% from $15.4 million or 20 cents per share in first quarter 2005. Revenue of $167.4 million was down 9.4% from $184.7 million in the same period last year.

“While we are seeing weaker sales in our existing resort residential business, there are signs of relative strength in other product categories, including our primary residential, commercial and rural land businesses,” Rummell says in a prepared statement. “We are moving quickly to capitalize on these business segments by taking advantage of the flexibility provided by the entitlements in our development pipeline.”

The weaker sales have been at WaterColor, WaterSound Beach, WaterSound West Beach, RiverCamps and SummerCamp. “Although the first quarter is traditionally the off-season in Northwest Florida, sales activity in our resort residential projects was slower than the same period a year ago,” Rummell concedes. “It appears that speculators are no longer a major demand element in this market.”

The Joe executive says “end-users are more deliberate and typically take more time to shop. There are also a larger number of resale units on the market, providing further options to potential buyers.” He adds, “The size of the resale inventory [at Joe] suggests it will be some time before we return to a favorable balance between supply and demand in this [residential resort] market segment.”

Rummell, a former Walt Disney World Co. executive, says Joe’s commercial business “has a solid pipeline going forward. …Demand remains solid for our commerce park product and we have begun pre-development work on a new commerce park in Bay County.”

Joe’s chief says he is also seeing “significant interest” in the retail market. “We are under contract with a national big-box retailer for the sale of a commercial site in Panama City Beach which will produce additional retail out-parcel opportunities,” Rummell says. “We are looking to the near and long-term future with real confidence.”

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