Earnings Preview: Centex

Centex Corporation (CTX) is expected to report Q4 earnings after market close Wednesday (April 30) with a conference call scheduled for Thursday at 10:00 am ET.

Guidance

Analysts are looking for a loss of ($2.43) on revenue of $2.2B. The consensus range is ($4.21)) to (24c) for EPS, and revenue of $1.77B to $2.9B, according to First Call.

Analyst Views

A Lehman Brothers analyst recently forecast more modest drops in closings, net orders and revenues for the company, but a $667M charge related to inventory.

In a research note, Deutsche Bank said that ongoing weakness in the market for previously-owned U.S. homes serves as a reminder that softness in residential housing is still spreading and is a signal a signal the spring sales season is off to a "poor start." Though the sector has endured billions of dollars of write downs due to the falling value of land, Deutsche said Centex remains a top pick.

On April 4, S&P Research upgraded the homebuilders sector to Neutral from Negative, which is dependent on the housing market's ability to reduce home inventory. In S&P's opinion, proposed federal legislation to aid the industry may provide a windfall in tax refunds to the depressed homebuilding industry. Additionally, improved balance sheets with growing available cash should enable most of the top builders to take advantage of reduced land prices ahead of a potential housing market recovery.