Atlanta, GA, November 7, 2006--Beazer Homes USA Inc. said Tuesday its fiscal fourth-quarter earnings fell 44 percent as higher revenue and home closings failed to offset squeezed margins.
Net income dropped to $91.9 million, or $2.19 per share, from $164.4 million, or $3.61 per share, a year ago.
Revenue climbed 4 percent to $1.88 billion from $1.81 billion last year.
On average, analysts surveyed by Thomson Financial were looking for profit of $1.65 per share on sales of $1.51 billion.
Beazer said it closed 6,411 homes during the quarter, up about 1 percent from 6,339 in the prior year, as decreased closings in Florida and the Mid-Atlantic were offset by increases in the West, Southeast and other homebuilding segments.
However, new orders dropped off 58 percent to 2,064 homes from 4,937 last year, as the housing market continued to slow.
The company's operating income margin slipped to 8 percent from 14.1 percent in the year-ago quarter due to a higher percentage of closings from lower margin markets, higher market-driven sales incentives and costs associated with overhead structure realignment.
"Beazer Homes had record fourth-quarter closings and revenue in fiscal 2006 as we focused on converting our existing backlog in what remains a challenging housing market," said President and chief executive officer Ian J. McCarthy. "Despite our strong close of fiscal 2006, most markets across the country continue to experience higher levels of resale home inventories, lower levels of demand for new homes, significant increases in cancellation rates and significantly higher discounting."
The company previously said it expected 2007 home closings of 12,000 to 13,500, and sees new orders in the range of 12,000 to 14,000 for this period.
If the company closes on 13,500 homes, Beazer is forecasting 2007 earnings per share of about $3.65 -- slightly below analysts' current consensus estimate of $3.69 per share.
