UPDATE 3-St. Joe posts smaller loss after Einhorn attack

* Tenth straight quarterly loss, smaller than forecast

* CEO says company “fine”; Einhorn selling shares short

* St Joe shares fall
(Adds CEO and CFO interview, byline)

By Jonathan Stempel

NEW YORK, Nov 2 (BestGrowthStock) – St Joe Co (JOE.N: ), a Florida
developer criticized by prominent hedge fund manager David
Einhorn for betting aggressively on beachfront properties,
posted its 10th straight quarterly loss on Tuesday, hurt by
several charges including for the BP Plc (BP.L: ) oil spill.

The loss was smaller-than-expected for the owner of 576,000
acres of land, mainly in the Florida Panhandle.

Einhorn, who oversees $6.8 billion at Greenlight Capital,
last month said St Joe is saddled with underdeveloped sites
that will require “substantial” write-downs and cannot generate
enough value to cover operating costs. [ID:nN13258241]

The New York-based hedge fund manager said he is selling St
Joe shares short, a bet they will decline. Einhorn’s Oct. 13
comments sent St Joe shares down 10.9 percent that day.

“He has his opinion,” St Joe Chief Executive Britt Greene
said in an interview. “We have a very strong position in the
marketplace, and have the benefit of very low (cost) basis land
and the benefit of being able to persevere. I think we’re
fine.”

Greene said Einhorn has not called or emailed him.

Einhorn was not immediately available to comment.

In his Oct. 13 comments, Einhorn also told an investment
conference he is shorting Moody’s Corp (MCO.N: ), the credit
rater faulted by critics for fueling the housing and credit
crisis by assigning high ratings to mortgage and other debt.

Einhorn’s criticism of St. Joe has been countered by Bruce
Berkowitz, whose Fairholme Funds own 29 percent of the company
and who was Morningstar Inc’s top equity mutual fund manager
for the last decade.

Berkowitz has called Einhorn’s criticism unfair, and
compared St Joe’s land holdings with once-fledgling and later
successful developments in southern Florida, Hilton Head, South
Carolina, and the Hamptons in New York. [ID:nN15197500]

St Joe shares fell 28 cents, or 1.4 percent, to $19.22 in
morning trading on the New York Stock Exchange. They began the
year at $28.89.

SMALLER LOSS

The third-quarter net loss for St Joe declined 10 percent
to $13.1 million, or 14 cents per share, from $14.6 million, or
16 cents, a year earlier. Revenue fell 35 percent to $27.1
million.

Excluding charges, including $2.6 million tied to BP’s
Deepwater Horizon oil spill in the Gulf of Mexico, the loss was
6 cents per share, according to Thomson Reuters I/B/E/S.

On that basis, results were better than the average analyst
forecast for a 9 cents per share loss on revenue of $20.1
million.

The WaterSound, Florida-based company last had a quarterly
profit in the first quarter of 2008, Reuters data show.

St Joe is suing Transocean Ltd (RIG.N: ) and a Halliburton Co
(HAL.N: ) unit for lost property value after the Deepwater
Horizon oil rig’s April blow-out. Transocean leased the rig to
BP, while Halliburton handled the cementing job.

Separately, St Joe said it sold 21 home sites for about
$3.77 million, or an average of $180,000, in the third quarter,
and ended September with $196.4 million of cash.

Greene said “we feel that we’re at the bottom, bouncing
along” in residential real estate, and declined to predict when
an upward trend might begin.

Chief Financial Officer William McCalmont added that St.
Joe is “very comfortable” with how it presents its financials.
(Reporting by Jonathan Stempel in New York; Editing by Derek
Caney, Gerald E. McCormick, Dave Zimmerman)

UPDATE 3-St. Joe posts smaller loss after Einhorn attack