After future partner Ryland announced earnings earlier on Thursday, Standard Pacific followed with its earnings release in the afternoon. 

The Irvine, Calif.-based builder beat Street estimates of it earnings per share behind higher-than-expected revenue from home sales growth of 17% year over year. Its total revenues $699.6 million compared beat the expected revenue of $668.10 million from analysts surveyed by RTT.com. Its gross margins of 24.6% were modestly above J.P. Morgan’s Michael Rehaut 24.2% estimate.

But StanPac’s orders were below analyst estimates. “Orders rose 3% (+10% ex-acquisition last year), driven by average community count growth of 11%, while absorption fell 7% (-1% ex-acquisition),” Rehaut wrote.

StanPacs’ Arizona, Florida, and California regions rose 45%, 10%, and 6%, respectively, while Colorado, the Carolinas, and Texas fell 17%, 7%, and 4%. Other builders have reported declines in Texas this quarter as well.

With a 12% increase in backlog, UBS's Susan Maklari expects solid growth. "Given our expectations for continued growth in neighborhoods, combined with easier absorption comps, we look for sales growth through the year.

Maklari thought the company executed well on its plan to focus on move-up buyers. "We were impressed with 2Q results overall as they reflect the benefits of the company's focus on the move-up segment of the market and its land purchases earlier in the recovery," she wrote.

Scott Stowell, the company's president and CEO echoed the comments of other public CEOs over the past couple of weeks when he talked about an improving housing market.

“Our results reflect a continuation of the housing market recovery and our focus on the execution of our strategy, with backlog value, the value of our orders, and home sale revenues up 30%, 26% and 17% respectively,” he said in StanPac’s release.

Here are some other highlights from its earnings release:

  • Net new orders of 1,567, up 10%; Dollar value of net new orders up 26% (excluding Q2 2014 acquisition)
  • Backlog of 2,572 homes, up 12%; Dollar value of backlog up 30%
  • 203 average active selling communities, up 11%
  • 1,305 new home deliveries, up 6%
  • Average selling price of $532 thousand (which is the highest price in company history), up 11%
  • Home sale revenues of $694.7 million, up 17%
  • Gross margin from home sales of 24.6%, compared to 26.6%
  • Operating margin from home sales of $90.8 million, or 13.1%, compared to $89.7 million, or 15.2%
  • Net income of $57.2 million, or $0.14 per diluted share, vs. net income of $56.5 million, or $0.14 per diluted share
  • $190.0 million of land purchases and development costs, compared to $212.0 million
  • Results include $5.2 million of transaction costs related to the proposed merger with The Ryland Group.