The Inman News Real Estate Stocks Index closed just shy of breakeven with a negligible loss of 65 cents in July, as a number of the companies in the hypothetical index announced or prepared to announce their financial results for the second quarter of 2005.
The two biggest contributors to the Index on a dollar basis were IndyMac, which added $2.64 to the total, and Interactive Corp., which gained $2.55. IndyMac reported what CEO Michael W. Perry characterized as “outstanding” results for the second quarter of 2005: Record revenues of $288 million, net income of $83.1 million, or $1.26 per share, and loan production of $14 billion. IndyMac’s board of directors declared a cash dividend of 40 cents per share, the ninth consecutive increase in the company’s quarterly dividend.
Interactive Corp., which operates the RealEstate.com and LendingTree Web sites, has altered its line-up up of Web sites with the completed acquisition of AskJeeves.com and imminent spin-off of Expedia and other travel properties. Merrill Lynch maintained its buy rating on IACI, which analysts said would “compare favorably” to similar media, eCommerce and travel companies.
ZipRealty was also in plus territory in July. The company opened for business in Houston, its second location in Texas and 14th market in the nation. Second-quarter financial results are expected Aug. 3.
Homestore was the biggest winner in the Index on a percentage basis; an eye-catching one-month gain of 25 percent translated to a respectable 51 cents per share. There was no significant company news, although Homestore was mentioned in passing in a Motley Fool story that identified four stocks that “may double again.” (The four were Shanda Interactive, Bankrate, Children’s Place and Gamestop.) Expect more news Aug. 4, when Homestore expects to release its second-quarter financial results.
Like IndyMac, Washington Mutual posted positive financial results that netted a boost on Wall Street. The company’s second quarter 2005 net income amounted to $844 million, or 95 cents per share, a result CEO Kerry Killinger characterized as a “solid performance” across all of the company’s business lines. WaMu’s directors declared a cash dividend of 48 cents per share, a one-cent increase compared with the prior quarter’s payout. Washington Mutual is in the midst of a $6.45 billion stock and cash acquisition of credit-card issuer Providian Financial Corp.
Countrywide’s shares suffered a 7.51 percent slide as the mortgage company posted softer financial results for the second quarter of 2005 than it had reported in the comparable prior-year period. Net income for the recent quarter amounted to $566 million or 92 cents per share. CEO Angelo Mozilo said the company could forgo some earnings from the sale of mortgages to generate future net interest income on loans retained in the company’s own portfolio. In the good news column, an analyst with Raymond James maintained a “strong buy” rating on the company with a target price of $50 per share, according to NewRatings.com.
The Inman Index of 10 publicly owned real estate broker, mortgage and technology stocks fell short of the gains posted by the Nasdaq Composite Index, Standard & Poor’s 500 and Dow Jones Industrials during the month. The Nasdaq index had gained 6.07 percent while the two other indices had gained, 3.61 percent and 3.57 percent, respectively, when the market closed on July 29, 2005.
Marcie Geffner is a real estate reporter in Los Angeles.
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