Stratus Swings to Q3 Loss on Weak Sales, One-Time Charges

Core Insights - Stratus Properties Inc. reported a net loss of 62 cents per share for Q3 2025, a significant increase from a net loss of 5 cents per share in the same quarter last year [1] - The company's revenues fell 44% to $5 million from $8.9 million in Q3 2024, primarily due to the absence of real estate sales [2] - Stratus incurred a net loss attributable to common stockholders of $5 million, compared to a net loss of $0.4 million in the prior year [2] Financial Performance - EBITDA turned negative at $5.5 million for the quarter, down from a modest $0.01 million in Q3 2024 [3] - Real estate operations posted a segment loss of $4.5 million, worsening from a $1.4 million loss in the previous year [3] - Leasing operations remained stable with revenue flat at $4.9 million, but segment profit decreased significantly from $3.3 million in the year-ago period [4] Management Commentary - The CEO highlighted the strategic repositioning efforts and announced an agreement to sell Lantana Place – Retail for approximately $57.4 million, which will help repay a project loan [5] - The company maintains a strong liquidity profile with a cash balance of $55 million and no outstanding draws on its revolving credit facility as of September 30, 2025 [6] Factors Influencing Results - The decline in revenues and profits was primarily driven by a sharp decrease in property sales, with real estate operations generating only $0.05 million in revenue compared to $4 million in the prior year [7] - The termination of a potential development project resulted in a $2.9 million write-off of previously capitalized planning costs [8] - General and administrative expenses rose to $3.9 million from $3.4 million, reflecting higher compensation and overhead costs [8] Other Developments - In October 2025, Stratus entered into an amended agreement to sell Lantana Place – Retail, expected to close in Q4 2025, with proceeds used to repay a project loan of $29.8 million [10] - The company repurchased 180,899 shares at an average price of $21.59 per share, totaling $3.9 million, with $21.1 million remaining under the share repurchase authorization [11]