Atlanta, GA, January 25, 2007--Home builder Beazer Homes USA Inc. said Thursday lower revenue and hefty charges drove the company to a fiscal first-quarter loss from year-ago profit, and noted it has "yet to see any meaningful evidence of a sustainable recovery in the housing market."
Losses for the quarter ended December 31 totaled $59 million, or $1.54 per share, compared with a profit of $89.9 million, or $2 per share, a year ago. Excluding charges to cover inventory writedowns and forfeited deposits on land options, adjusted net income totaled $15.9 million, or 41 cents per share, in the latest period.
Revenue slid to $806.4 million from $1.1 billion a year ago.
Analysts were looking for adjusted profit of 26 cents per share on sales of $720.6 million, according to a Thomson Financial poll.
"Operating conditions remained extremely challenging for the housing industry during our first quarter of fiscal 2007," said president and chief executive Ian J. McCarthy. "Most markets across the country continue to experience lower levels of demand for new homes, high cancellation rates and significant levels of discounting."
Total quarterly home closings of 2,660 fell 31 percent year-over-year and net new home orders of 1,779 homes were down 54 percent, due to reduced demand across the company's markets and a 43 percent cancellation rate--compared with historically normal levels of 26 percent.
Beazer did note that its cancellation rate declined from 57 percent in the fourth quarter of fiscal 2006.
Looking ahead, the company said the current market environment continues to be characterized by weak demand, with heavy discounting required to drive meaningful sales volume.
Beazer now sees the low end of its previously announced outlook of 12,000 to 13,500 closings as a more reasonable target in fiscal 2007, and forecasts 2007 adjusted profit of $1.25 to $1.50 per share.
Analysts are expecting full-year earnings per share of $2.47.
