Sellers hammer Standard Pacific, IndyMac on loss reports

Wall Street’s reaction to quarterly financial reports from home builder Standard Pacific Corp. and mortgage lender IndyMac Bancorp this morning: Sell first, ask questions later.

Shares of Irvine-based Standard Pacific slid as low as $2.72 from $3.77 on Friday after the firm said its first-quarter loss ballooned to $216 million, or $3.34 a share, far exceeding analysts’ estimates. Read the report here. The company also said it’s working with its lenders to extend an easing of restrictions on its finances and hopes to have a final agreement by Wednesday.

The average home sale price across all of Standard Pacific’s markets was $347,000 in the quarter, down 10% from a year earlier, because of "the level of incentives and discounts and price-cutting required to sell homes," the company said.

By contrast, the average selling price was $406,000 in the fourth quarter, down 3% from a year earlier.

Pasadena-based IndyMac's shares fell as low as $3.08, from $3.43 on Friday, after the company said it lost $184 million, or $2.27 a share, in the quarter, also worse than analysts had expected. The report is here.

Although IndyMac reiterated its recent forecast that losses should grow smaller as the year progresses, CEO Michael Perry warned that "we do not expect that IndyMac will be able to return to overall profitability until the current decline in home prices decelerates."

Based on Standard Pacific’s selling experience, the hoped-for "deceleration" of price declines still looks to be somewhere on the far horizon.