Housing Market Tracker - Homebuilder Earnings

Quote of the Day

"We believe the great majority of the impairments are behind us." - Meritage Homes CEO Steve Hilton. (Big Builder Online, Jan. 29th)

Homebuilder Stocks

Meritage Discloses Joint Venture Exposure. "Meritage Homes' (MTH) joint venture arrangements: The equity method JVs show total assets of $632M and equity of $167M, of which $22M is showing as Meritage equity on its books. Of the total, the company has impaired its interest in four of the JVs, which makes up about 25% of the assets and debt. The largest single JV represents $361M --more than half--of the assets; Meritage has a 20% interest in the venture and has impaired its investment by $15M. The cash method JVs show total assets of $1.4 billion and total equity of $462M. Meritage however has limited ownership in these." (Big Builder Online, Jan. 29th)

NVR's Fourth-Quarter Orders Down 35 Percent. "Homebuilder NVR (NVR)is still making a profit... Net income for Q4'07 was $67.3 million, a decrease of about 50% compared to $135.2M a year ago. The company said Q4'07 results were negatively impacted by land deposit impairments of about $97M. New orders for Q4 slid 35% to 1,948 units, compared to 3,002 units for Q4'06. The cancellation rate for Q4'07 was 32% compared to 20% a year ago. The Q4'07 cancellation rate in the Washington, D.C., market was especially high... at 46% compared to 34% in Q4'06... Net income for F2007 was $333.9M, a 43% decrease compared to $587.4M a year ago." (Builder Online, Jan. 29th)

TOUSA Files for Chapter 11 Bankruptcy Protection. "TOUSA (TOA), the industry's 13th-largest home builder in 2006, announced that it, too, was filing Chapter 11 in U.S. Bankruptcy Court of Florida. The company's petition with that court lists $2,276,576,000 in assets and $1,767,589,000 in liabilities, as of Sept. 30, 2007. That filing would place under bankruptcy protection the parent company in the U.S. and all branded home building operations, which include Newmark Homes, Trophy Homes, and Engle Homes. However, TOUSA's title, insurance, mortgage, and information services subsidiaries are not included in this filing, and TOUSA's CEO, Tony Mon, emphasized that there would be "no interruptions in services" under Chapter 11." (Builder Online, Jan. 29th)

Housing Downturn Hits Centex. "Homebuilder Centex Corp. (CTX) expects housing to weaken further in 2008... Centex reported a FQ3 net loss of $975.2 million, or $7.94/share, compared with a net loss of $228.1M, or $1.90/share, a year earlier... Centex took a FQ3 land-related write-down of $554.2M, compared with a year-earlier land-related write-down of $439.7M. It also wrote off $26.4M of deposits on land and booked a $24M charge for its share of joint ventures. Continuing-operations... losses were $7.94/share for FQ3, versus a loss of $2.02/share a year earlier. FQ3 revenues slid 30% to $1.91 billion from $2.73B." (Wall St. Journal, Jan. 29th)

Home Builders Trying to Cope With Horrible Market. Missouri: "To keep the company afloat, Taylor-Morley Homes has sold off hundreds of undeveloped home sites... CEO Taylor: Taylor-Morley reduced its inventory of undeveloped land from more than 800 sites to a couple of hundred... Hardesty Properties Inc. has reduced staff from 36 to about 23, said Brett Hardesty, managing member... Ill.-based Fulford Homes has laid off six of 24 employees... McBride & Son Cos. is among the few builders bucking the new home slump. The company's two brands, McBride Homes and Vantage Homes, both increased sales last year... McBride offers price reductions on houses in inventory, and low-payment options." (Big Builder Online, Jan. 29th)

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