Newspaper article The Florida Times Union

Panhandle Projects Profitable for St. Joe

Newspaper article The Florida Times Union

Panhandle Projects Profitable for St. Joe

Article excerpt

The St. Joe Co. yesterday reported higher second-quarter earnings, as the company starts to see benefits from its development of property in the Florida Panhandle.

Also, Florida East Coast Industries Inc., which is 54 percent owned by St. Joe, reported lower earnings due to one-time charges, including separation benefits for 26 employees who left the company voluntarily and involuntarily during the quarter.

Jacksonville-based St. Joe reported net income excluding one-time items of $14.7 million, or 17 cents per diluted share, up from $8 million, or 9 cents a share, last year.

The company also recorded a big one-time gain from a technical adjustment on pension excise taxes that boosted final net income for the quarter to $38.8 million, or 44 cents per diluted share.

St. Joe owns more than 1 million acres of Florida real estate, including some prime beachfront property in West Florida that it is beginning to develop for residential use. The company began selling lots in a development called The Retreat along the Gulf of Mexico in Walton County in the second quarter and already has sold 79 lots at an average price of $402,000.

In a conference call with investors yesterday, St. Joe Chairman and Chief Executive Officer Peter S. Rummell said sales in The Retreat have gone for 50 percent higher than originally planned and are being sold two years ahead of the original schedule. That shows the pent-up demand for that type of property, he said.

"This is a strong indication that our strategy is working," Rummell said.

St. Joe has several other residential developments under way, including the 194-acre James Island development on Jacksonville's Southside. St. Joe has 52 homes there sold or under contract.

St. Joe in March announced it would put 800,000 acres of timberland it owns in the Panhandle up for sale. Last week, St. Joe sold 13,275 acres of that to the state of Florida for $9.9 million.

But aside from that sale, the company has put its timberland sales on hold because market conditions have weakened. …

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