Dallas, TX, Apr. 21--U.S. home builder and mortgage company Centex Corp. on Tuesday said its net income for the quarter rose 53 percent, in part from higher home prices.
Dallas-based Centex said net income rose to $300 million, or $2.30 a share in the fiscal fourth quarter ending March 31, 2004, from $196.7 million, or $1.56 per share, in the year-ago quarter.
Excluding the recent spinoff of its Construction Products business, Eagle Materials Inc., the company reported fourth-quarter earnings of $267.99 million, or $2.05 per share, easily beating Wall Street's expectations. That compares with with $198.6 million, or $1.58 per share in the year ago period.
Analysts had expected earnings of $1.74 per share, with 12 analysts estimates ranging from $1.62 to $1.79 per share.
New home prices helped drive operating margins up more than two percent.
"They have these huge margins from pricing power and a lot of that would be California," said Natexis Bleichroeder analyst Barbara Allen.
Centex, which develops single-family homes, townhouses and low-rise condominiums, said revenue rose 18 percent to $3.19 billion, from $2.71 billion a year earlier.
Home building revenues rose 19 percent to $2.48 billion from $2.08 billion in the fourth quarter last year.
The company ended the quarter with a backlog of homes sold, but not delivered, of 15,414 units, 28 percent higher than the backlog at the same time the prior year.
Centex ended the fiscal year with a record U.S. closings of 30,358 homes sold, 15 percent above the prior year. The average number of neighborhoods totaled 558, an 8 percent increase over the average community count of 519 reported for fiscal 2003.
The company's British operations, Fairclough, closed 1,547 homes during the year.
While the company's home building operations rose during the quarter, its financial division fell 12 percent versus the prior fourth-quarter. Mortgage-related services fell, while its home equity unit saw operating earnings rise.
Despite recent fears of rising interest rates, the company raised its outlook for fiscal 2005 to a range of $6.50 to $7.00 per share.
Allen said the backlog of homes nearly accounts for the outlook of the next six months.
"After that, no matter what management says, they really don't know," she said. "It greatly depends on what interest rates do and what happens to demand as you're building that backlog for the remainder of the year."
Analysts had expected the company to post fiscal 2005 earnings of $6.41 per share, according to Reuters Research.
