Dallas, TX, July 25, 2006--Homebuilder Centex said its net profit in the first quarter fell 31 percent and orders were off 21 percent, prompting the company to slash its forecast in another sign of the eroding housing market.
Centex said its net profit fell to $160.3 million, or $1.27 per share in the quarter ended June 30, from $233.7 million, or $1.74 per share in the year-earlier quarter.
Analysts had expected earnings from continuing operations of $1.37 per share.
Centex followed in step with other home builders who have reported falling orders and have slashed their forecasts, bemoaning the flood of unsold homes on the market, especially from speculators dumping their investments that no longer rapidly increase in value.
Many analysts and economists have said home-buyers were priced out of the market.
During the quarter Centex closed on the sale of 8,318 homes, up 1 percent. Closings fell 11 percent in the once-sizzling Southeast, where new orders tumbled 43 percent. Total new orders fell 21 percent.
With the order fall-off, Centex walked away from options contracts for land, writing off $36 million of options deposits.
The company reduced its forecast for current fiscal year earnings from continuing operations to $7.00 per share, down from its previously reduced forecast of a range of $8.50 to $10 per share.
For the fiscal second quarter, the company said it sees earnings from continuing operations of $1.40 per share. Analysts had expected the company to post full-year earnings from continuing operations of $7.42. They expected $1.75 for the fiscal second quarter, ending in September.
