Beazer swings to 1Q loss as earnings drop 200%
Beazer Homes USA (BZH) swung to a first-quarter loss as demand for new housing depleted in the absence of federal home-buying incentives. The Atlanta-based homebuilder reported a loss of $48.8 million, or 66 cents a share, for the three months ended Dec. 31, down more than 200% from a $48 million, or $1.17 per share, income a year earlier. "As we anticipated, conditions remained very challenging in the homebuilding sector during our first quarter," commented Ian McCarthy, president and chief executive officer of Beazer. "Despite low interest rates and excellent home-price affordability, demand for new homes remained at exceptionally low levels." Revenue plummeted 48% to $110.3 million from $213.1 million a year prior. The homebuilding operation primarily drove the firm's revenue base, accounting for $110 million. Land sales and other business ventures brought in just $313,000 in revenue during the first quarter. Beazer reported a total of 527 home closings and 540 new orders during the reported period, down 43.6% and down 23.9%, respectively. But McCarthy remains optimistic as he anticipates the home-buying season picking up and sparking demand. "We remain hopeful that we will see the initial stages of a cyclical recovery in the demand for new homes this year," he said. "While actual and potential foreclosures will likely keep home prices under pressure for some time, the steady increase in residential rents provides potential home buyers with an increasingly attractive option in homeownership. "We believe we are well positioned to participate in the eventual housing recovery." At the end of the company's first fiscal quarter, Beazer held $1.9 billion worth of assets on its balance sheet. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR Disclosure: The author holds no relevant investments.