Dallas TX, July 27--Home builder Centex reported first quarter earnings that rose 32 percent, driven in part by an increase in home closings and selling prices, and it raised its full-year outlook.
Net earnings rose to $233.7 million, or $1.74 per share, for its fiscal first quarter ended June 30, from $177.2 million, or $1.35 a share, a year earlier, Centex said.
Analysts, on average, had expected Dallas-based Centex to earn $1.69 a share, according to Reuters Estimates.
Revenue rose 16 percent to $3.22 billion, beating the $3.20 billion expected by analysts.
Centex, the No. 4 builder of single-family homes, townhouses and condominiums, said gross margin improved mainly because of an increase in average selling price, geographic mix and process improvements but were pressured by higher material and labor costs.
The U.S. housing market has remained strong, despite the Federal Reserve's rate hikes. The average rate on a 30-year mortgage has remained relatively low, under about 6 percent. Other mortgage products, such as variable-rate loans, have helped to fuel the boom.
During the quarter, Centex closed on 12 percent more homes in the United States year on year, or 8,235 units. U.S. orders for new homes rose 15 percent to 10,419 homes.
U.S. home building revenue rose 26 percent to $2.4 billion and operating margin rose 240 basis points to 14.2 percent.
Centex ended the quarter with a backlog of 20,773 homes contracted for and awaiting construction, up 22 percent from a year earlier. The value of the homes in its backlog rose 31 percent on the year to $6.58 billion.
Financial services revenue rose 11 percent to $304 million.
Last month, Centex said it was considering selling its U.K. home-building operations, Fairclough Homes. The company said on Tuesday it had received expressions of interest in Fairclough and would consider using proceeds from a sale for share repurchases and investment in U.S. operations.
Centex raised its fiscal 2006 earnings per share from continuing operations forecast to a range of $9.10 to $9.35, from $8.75 to $9.25. Analysts expect it to post full-year 2006 operating earnings of $9.19 per share.
Centex shares were unchanged in after-hours trading on the Inet electronic brokerage system from Tuesday's close of $75.61 on the New York Stock Exchange.
Since the start of the year, Centex shares have gained 27 percent, compared with a 33 percent gain in the Dow Jones U.S. Home Construction Index , a wide barometer of home building stock activity.
