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Mar 31, 2024
Howard Hughes Q1 2024 Earnings Report
Howard Hughes Holdings Inc. reported a net loss of $52.5 million for the first quarter of 2024, primarily due to reduced commercial land sales, lower equity earnings from The Summit, and increased G&A expenses.
Key Takeaways
Howard Hughes Holdings Inc. reported a net loss of $52.5 million for Q1 2024, or $(1.06) per diluted share, compared to a net loss of $22.7 million, or $(0.46) per diluted share, in the prior-year period. Total revenues were $171.1 million. Operating Assets NOI increased 7% year-over-year to $63.5 million, driven by improved performance in office and multi-family segments. New home sales in HHH's communities increased 24% sequentially to 654 units, indicating strong demand for residential land sales.
Net loss per diluted share was $(1.06), primarily due to reduced commercial land sales, lower equity earnings from The Summit, and increased G&A expenses related to the anticipated spinoff of Seaport Entertainment.
Total Operating Assets NOI increased 7% year-over-year to $63.5 million, with strong performance in office and multi-family portfolios.
New home sales in HHH's communities increased 24% sequentially to 654 units, signaling strong demand for residential land sales in coming quarters.
The company launched pre-sales at The Ritz-Carlton Residences, The Woodlands, pre-selling over 50% of available inventory for approximately $250 million in future revenue in just one week.
Revenue by Segment
Forward Guidance
Full-year 2024 guidance remains unchanged, with robust MPC EBT projected at $300 million, Operating Assets NOI at $250 million, and condo sales between $675 million and $725 million with gross margins of 28% to 30%.
Positive Outlook
- MPC EBT is projected to be robust, aided by stable mortgage rates and tight supply of existing homes.
- New home sales in Summerlin, Bridgeland, and The Woodlands Hills are expected to be strong, driving homebuilder demand for residential land.
- First land sales in Floreo (Teravalis) are expected to contribute incremental equity earnings.
- Operating Assets NOI is projected to benefit from increased occupancy at new multi-family developments and improved retail leasing.
- Condo sales revenues are projected to be strong, driven by the closing of units at Victoria Place, which is 100% pre-sold.
Challenges Ahead
- Reduced EBT associated with exceptional commercial land sales and builder price participation during 2023 will offset some gains.
- Reduced inventory of custom lots available to sell at Aria Isle in The Woodlands and The Summit in Summerlin.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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