AMREP Stock Dips Post Q2 Earnings as Land Sales Slide, Margins Improve

Shares of AMREP Corporation AXR have lost 8.4% since the company reported earnings for the quarter ended Oct. 31, 2025, compared with a 1.2% decline in the S&P 500 Index over the same period. Over the past month, AMREP shares lost 3.7%, while the benchmark index advanced 2.6%.AXR’s Earnings SnapshotFor the second quarter of fiscal 2026, AMREP reported net income of $1.2 million, or $0.22 per diluted share, a 70.3% decline from $4 million, or $0.75 per diluted share, in the year-ago quarter. Revenue for the quarter decreased 21.1% year over year to $9.4 million from $11.9 million.For the first six months of fiscal 2026, net income totaled $5.9 million, or $1.09 per diluted share, down 27.3% from $8.1 million, or $1.51 per diluted share, in the prior-year period, while revenue declined 12.1% to $27.3 million from $30.9 million.Segmentally, land sale revenues fell 85.9% in the quarter and 45.3% for the six-month period, reflecting fewer land transactions, while home sale revenues rose 44.8% in the quarter and 20.7% for the six months, driven by a higher number of homes sold. Other revenues, including landscaping and rental-related income, increased 18.6% in the quarter and 11.6% for the six-month period.AMREP’s Other Key Business MetricsLand sale gross margins improved to 80% in the quarter and 70% for the six-month period, compared with 60% and 52%, respectively, a year earlier, largely due to the mix of properties sold and reimbursements related to infrastructure and impact fees. Home sale gross margins also improved to 25% from 20% in both comparable periods, despite higher input costs.General and administrative expenses increased 7.2% year over year in the quarter and 10.1% for the six-month period, reflecting higher compensation, professional services and depreciation. Operating income declined 64.4% to $1.1 million in the quarter from $3.1 million a year earlier, reflecting lower land sale activity and higher cost pressures, though partially offset by stronger homebuilding results.AMREP Corporation Price, Consensus and EPS Surprise AMREP Corporation price-consensus-eps-surprise-chart | AMREP Corporation QuoteAXR’s Management CommentaryManagement highlighted ongoing challenges related to municipal entitlement delays, infrastructure availability and inspection timelines, which have affected both land development and homebuilding activities. The company noted that while pricing strength has helped offset some cost inflation, higher mortgage rates, elevated home prices and broader inflationary pressures have weighed on housing affordability and demand. As a result, AMREP has adjusted its operating strategy by offering sales incentives, reducing certain home prices, slowing housing starts and leasing completed homes to mitigate demand softness.Factors Influencing AMREP’s Headline NumbersThe year-over-year decline in earnings was primarily driven by a steep reduction in land sale revenues, as the timing and scale of land transactions varied significantly from the prior year. Although homebuilding activity improved, higher construction costs for materials and skilled labor continued to pressure profitability. Interest income remained a positive contributor, though it declined 20.3% on a quarterly basis. Income tax expense also weighed on results, as the prior-year quarter benefited from a tax-related adjustment tied to the termination of the company’s pension plan.AXR’s GuidanceAMREP did not provide formal earnings or revenue guidance. However, management cautioned that revenues and margins may continue to fluctuate due to market uncertainty, affordability constraints and ongoing delays in development approvals. AXR expects reduced land sale revenues in fiscal 2026 compared with fiscal 2025, given a scaled-back development pipeline and slower project progression amid current market conditions.AMREP’s Other DevelopmentsDuring the quarter, AMREP amended its revolving line of credit, extending the maturity to August 2028 and increasing the borrowing capacity to $6.5 million. The company also continued to expand its portfolio of leased homes, ending the quarter with 28 homes rented to residential tenants, up from 21 at the end of the prior fiscal year, reflecting a strategic response to softer homebuying demand. No acquisitions, divestitures or major restructuring activities were reported during the period.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? 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