Earnings Preview: Centex Corp.

Centex Corp. (CTX) is expected to report Q2 earnings Tuesday after the close with a conference call scheduled for Wednesday at 10:00 am.

Guidance

Analysts are looking for a loss of (94c) on revenue of $1.3B. The consensus range is ($2.04) to (17c) for EPS, and revenue of $1.19B to $1.48B, according to First Call.

Due to deteriorating economic conditions, the board of directors on October 9 suspended its regular quarterly cash dividend, and said it will consider alternatives for returning cash to shareholders as economic conditions improve.

Due to increasing debt and broader economic woes, Moody's Investors Service on October 8 downgraded all its credit ratings for the homebuilder. It said the company may have to go back to lenders to renegotiate its credit facility. Moody's says that if it does this its ability to borrow money could be hurt. Moody's, which cut Centex's corporate debt, probability of default and senior notes ratings to Ba3 from Ba2, says further cash generation will depend on continuing strong inventory reduction, which may be difficult to accomplish in the current environment. Moody's outlook on the company remains negative reflecting the sluggish housing market.

Comments

[Tinkky:]

How are the employees holding up with Centex? Are any of the current employees jobs in jeopardy?

2008 Oct 27 07:18 PM