Tri Pointe Homes (NYSE:TPH) reported a sharp contraction in fourth-quarter profitability on Wednesday, even as the company moves toward a definitive exit through its previously announced acquisition by Sumitomo Forestry.
The Irvine, California-based homebuilder posted net income of $60.2 million, or $0.70 per diluted share, down significantly from the $129.2 million, or $1.37 per share, recorded in the prior-year period.
The results were pressured by $11.8 million in inventory-related charges.
Excluding these items, adjusted net income stood at $68.4 million, or $0.80 per diluted share.
Revenue from home sales fell to $945.9 million, compared with $1.2 billion a year earlier, driven primarily by a 22% drop in new home deliveries, which fell to 1,364 units.
The homebuilder’s margins also faced headwinds.
Homebuilding gross margin compressed to 19.3% from 23.3% year-over-year.
On an adjusted basis, excluding interest and impairments, the margin was 24.1%.
Meanwhile, the average sales price of delivered homes remained relatively flat at $693,000.
Despite the softer operational performance, Tri Pointe maintains a robust balance sheet as it heads toward its merger.