Friday Night Rewind It doesn't matter which team you cheer for. We've got video previews of every high school football program in Hillsborough, Pinellas, Pasco and Hernando County.
TAMPA — Walter Industries Inc. will sell or spin off its home building and financing businesses by the end of the year, focusing on its profitable natural resources business, which allows it to capitalize on record prices for coal.
The company said the expansion of one of its Alabama mines will allow it to sell even more coal this year than previously projected. Walter said its metallurgical coal, a high-quality coal used in steel production, has been selling for more than $315 a ton.
Investors saw the report as very good news, in spite of the lower profits the company reported for the first quarter. The stock closed Friday at $72.95, up $5.24 in trading on the New York Stock Exchange.
Walter said it hasn't decided how it wants to divest its home building and finance businesses, but it's working with tax, legal and investment banking advisers on the project, which it wants to complete by year's end.
Walter has been in the low-cost housing business since 1946. It will continue to build homes on buyers' lots using third-party financing, but it will no longer make new loans. Officials said the arrangement may allow Walter to build more expensive homes than it has in the past.
The meltdown in the credit markets is behind the company's decision to stop lending.
"Right now, you cannot finance the origination of mortgage assets, short-term or long-term, no matter what the quality," said Mark O'Brien, who heads the housing and finance units. In the past, Walter mortgages have ended up bundled into mortgage-backed securities. However, investors are no longer willing to buy those securities in the face of the deteriorating housing market and rising foreclosures.
The company recorded a $17-million loss on an interest-rate hedge contract it had purchased in conjunction with a planned securitization. When plans to securitize a group of mortgages fell through, Walter was forced to keep $330-million in mortgages on its books. The company also is recording another $11-million in restructuring and other charges related to the home building and financing businesses.
Walter reported $295.7-million in revenue for the quarter, down 7.7 percent from a year ago. Net income fell 98 percent, to $499,000 or 1 cent per share. The company said it lost $21.4-million on its finance and home building units, but made $36.5-million on other continuing operations.
Helen Huntley can be reached at hhuntley@sptimes.com or (727) 893-8230.
[Last modified: May 02, 2008 11:57 PM]
Subscribe to the Times
Click here for daily delivery
of the St. Petersburg Times.
News
