Junior real estate developer Comstock Holding Companies, Inc. (CHCI) Wednesday reported a smaller loss for the fourth quarter than a year earlier on substantially less revenue, but forecast a profit for the current year, citing a rebounding housing market to bolster its books.
The Reston, Virginia-based home builder and service company said revenue during the quarter ended December 31, 2012 fell to $2.6 million from $6.1 million in the fourth quarter of 2011. For the quarter, Comstock reported a net loss of $2.0 million, or 10 cents per share, improving from a net loss of $2.7 million, or 14 cents per share, in the year prior quarter.
"For the first time in a number of years there is clear and convincing evidence that the housing market has rebounded and will continue to improve," said Christopher Clemente, chairman and chief executive of Comstock.
Clemente also said that the 2012 results were “disappointing,” but the company worked to position itself for 2013 and beyond. “Based upon our early sales success at our recently opened new communities, 2013 is off to a great start, with unit sales and revenue in the first quarter of 2013 expected to approximate the revenue levels for all of 2012," said the Comstock chief.
For the complete 2012 year, the company posted revenue of $14.3 million, versus $21.9 million in 2011. Comstock reported a net loss of $5.7 million, or 28 cents per share, for the full year, a big swing from the net income of $1.1 million, or 5 cents per share, recorded in the prior year. 2012 included a net income gain of $6.5 million resulting from the sale of its Cascades apartment project and impairment charges of $2.4 million on its Eclipse apartment project, while 2011 benefited $9.4 million from a legal settlement.
The company said it is seeing increased demand for new homes in its primary market of the Washington, D.C. area. The demand is expected to allow the company to swing back to profitability in 2013 and has set a goal of revenue growth in the range of $125 million to $150 million by 2015.
For the first quarter of 2013, the company sees homebuilding revenue between $10 million and $12 million. For the full year 2013, Comstock forecasted homebuilding revenue of $55 million to $64 million.
Shares of CHCI have been range bound for the past year, essentially stuck between $1.10 and $1.60. Shares closed on Tuesday near the lower end of that channel at $1.17. Wall Street is liking the tightening of the net loss in the fourth quarter and the projections for the year with shares storming higher in early Wednesday trading, printing $1.68 for gains of 43 percent.
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