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SMALL BUSINESS
Beazer Homes posts profit in fiscal 4th quarter
By ALEX VEIGA
, AP
-Beazer Homes USA Inc. reported its first quarterly profit since 2006 on Tuesday and credited more stable home prices and cost cuts for a marked improvement in the homebuilder's gross margins.
The Atlanta-based company also posted an annual increase in new home orders, as low mortgage interest rates and a first-time homebuyer tax credit helped lure buyers. Beazer said it expects orders for the current fiscal year to modestly outpace those of fiscal 2009.
The company said foot traffic slowed somewhat in October as would-be buyers waited for word on whether the government would extend the tax credit. That news came last week as Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
Beazer saw a jump in the number of shoppers over the weekend in some markets.
"We've got a six-month runway here of a tax credit, great affordability and great mortgage rates," said Ian McCarthy, Beazer's president and chief executive. "It's the industry's job and certainly our job to convince buyers that this is now a great time to buy a Beazer home."
The builder is even gearing up to buy more land — something rivals such as Ryland Group Inc., and Meritage Homes Corp., have been doing.
"Our belief that market conditions will modestly improve in 2010 does necessitate the need to begin securing additional land positions in certain markets," McCarthy said.
Investors applauded the builder's fiscal fourth-quarter results, propelling the stock as much as 15 percent higher at one point. Shares rose 41 cents, or 8.7 percent, to close at $5.10 Tuesday.
Beazer said net income for the period ended Sept. 30 totaled $33.8 million, or 84 cents per share. That compares with a loss of $473.9 million, or $12.29 per share, a year earlier. Excluding discontinued operations, earnings amounted to 87 cents per share.
The latest quarter includes pretax gains totaling $89.3 million on the early prepayment of debt.
The company's gross profit margin improved to 6.6 percent in the quarter, compared to negative 0.7 percent a year ago.
Revenue fell 42 percent to $376.3 million as completed sales tumbled 24 percent.
On average, analysts expected a loss of $1.24 per share on revenue of $338.3 million, according to a survey by Thomson Reuters.
New home orders rose 2.4 percent from a year earlier, with Indianapolis, Houston, Los Angeles and Nashville, Tenn., among its strongest markets.
—
AP Real Estate Writer J.W. Elphinstone in New York contributed to this report.
—
On the Net:
Beazer Homes USA:
http://www.beazer.com/
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2009-11-10 18:16:12
COMMENTS ( 1 )
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ERink91321
9:03AM Nov 10 2009
Reviving the Housing Construction industry at a time when Foreclosures are everywhere and Many More to come makes absolutely no sense at all, Only Chaos. Just look around and do the Math. The Real news they are Not telling you is- the same amount of Foreclosures that occured last year up to now will occure next year also. Also, If you are wondering why your house is Losing Value you can Blame Freddie Mac, Fannie Mae and State and Local Government for Allowing the Builders to Overbuild and Flood the Market with Unwanted Houses and Shopping centers. In states like Florida and California this Overbuilding Screwed the Entire State.. New Towns and even new Counties and Cities sprung up from Hell during the last 30 years and many of them have economicly collapsed and have been abandoned leaving behind Useless Particle Board buildings and a Ruined National Economy. Pollution is Everywhere and Raw Materials Are Near Depletion. It is time to End the practice of relying on the Housing and Construction Industry as a means of Speculation, employment or Economic gauge. The Truth is this Industry is the Biggest Waster of our Natural and Economic Resources which are Now Near Depletion
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