Howard Hughes 2025 Q2 Earnings Sharp Net Loss Deteriorates 157.3%

Howard Hughes (HHH) reported its fiscal 2025 Q2 earnings on Aug 6, 2025. The company missed expectations with a significant net loss, driven by a sharp drop in revenue and a reversal from profitability in the prior-year period. Executives, however, raised full-year guidance across multiple metrics, reflecting confidence in long-term cash flow potential from MPCs and operating assets.

Revenue
Total revenue for Howard Hughes declined by 8.0% to $260.88 million in Q2 2025, compared to $283.47 million in Q2 2024. Condominium rights and unit sales contributed $193,000, while Master Planned Communities land sales accounted for $125.04 million. Rental revenue generated $111.09 million, and other land, rental, and property-related income added $10.42 million. Builder price participation revenue amounted to $14.14 million, rounding out the company’s diversified revenue streams.

Earnings/Net Income
Howard Hughes swung to a loss of $0.22 per share in Q2 2025, compared to a profit of $0.42 per share in the same period of 2024, representing a 152.4% negative change. The company reported a net loss of $12.08 million, a 157.3% deterioration from the net income of $21.06 million in Q2 2024, underscoring a challenging earnings performance.

Price Action
The stock price of Howard Hughes edged down 0.53% on the latest trading day and declined 1.21% during the most recent full trading week. However, the stock gained 0.63% month-to-date, showing mixed investor sentiment in the near term.

Post-Earnings Price Action Review
The strategy of buying Howard Hughes following an earnings beat and holding for 30 days delivered a return of 39.11%, underperforming the benchmark by 45.30%. While the approach exhibited a maximum drawdown of 0.00% and a Sharpe ratio of 0.21, indicating relatively low risk, the lack of excess return and high volatility pointed to its conservative nature with limited growth potential.

CEO Commentary
David R. O’Reilly, CEO of Howard Hughes, emphasized the company’s strong cash generation and long-term growth prospects. He highlighted record Adjusted Operating Cash Flow, a robust pipeline of condo tower completions, and the strategic benefits of its spinoff of Seaport Entertainment. O’Reilly expressed confidence in leveraging Pershing Square’s investment expertise to drive future value creation.

Guidance
The company raised its full-year 2025 Adjusted Operating Cash Flow guidance to $410 million, or $7.32 per diluted share, an increase of $60 million, or $0.32 per share. MPC EBT guidance was raised to $430 million, up $55 million, and Operating Assets NOI guidance was raised to $267 million, an increase of $5 million. The CEO expects continued strong cash flow from MPC land sales, operating assets, and future condo completions.

Additional News
Bill Ackman’s Pershing Square Holdings is investing $900 million to transform Howard Hughes Holdings into a diversified firm with residential and retail assets under management, moving beyond a pure-play real estate company. Ackman, during a Q2 earnings call, outlined plans to acquire an insurance firm to generate capital for further acquisitions, mirroring the strategy of Warren Buffett’s Berkshire Hathaway. Howard Hughes’ total net operating income (NOI) reached $69 million in Q2 2025, up 5% year-over-year, and full-year NOI guidance increased to $267 million. Profits in master-planned community sales also grew, with an average price per acre reaching $1.35 million, up 29% year-over-year. Ackman highlighted the resilience of home sales, attributing it to the quality of assets and strong infrastructure in communities like Las Vegas’ Summerlin and Houston’s Bridgeland. He emphasized the advantages of acquiring an established insurance firm for immediate revenue and lower regulatory risk. Ackman also indicated a strategic focus on diversifying returns rather than replicating existing MPC success in new markets.