Major Home Builders Continue To Struggle

Fort Worth, TX, Nov. 5, 2008--Home builders continue to struggle with the weak housing market.

D.R. Horton said it expects to post a fourth-quarter loss of $800 million to $900 million, including an expected tax benefit of about $350 million. In the year-ago quarter, the builder lost $50.1 million.
 
"Market conditions in the home-building industry deteriorated during our fourth fiscal quarter and October, characterized by rising foreclosures, high inventory levels of both new and existing homes and reduced liquidity in the mortgage markets," said Chairman Donald Horton in a prepared statement.

"In addition, consumer confidence has been eroded by a weakening economy, higher unemployment and record volatility in the capital markets," he said.

The company said quarterly revenue was cut in half from the year-earlier period to $1.5 billion. The cancellation rate, or cancelled sales orders divided by gross sales orders, was 47% in the latest quarter.
 
Elsewhere, K.B. Home became the latest home builder to cut its quarterly dividend. Tuesday it cut its quarterly dividend 75% to 6.25 cents a share from 25 cents.

KB Home said it wants to stay financially strong and prepare for opportunities as the housing market recovers.

Centex in early October suspended its quarterly dividend of 4 cents a share, citing tough economic conditions. 
John Spence is a reporter for MarketWatch in Boston.