Homebuilders See Stable Housing Market Ahead
By Alex Veiga
NEW YORK — The CEOs of some of the nation’s biggest homebuilding companies said yesterday that they feel the housing market has stabilized.
But they were careful not to be overly optimistic even with the spring home-selling season coming up. A year ago many housing experts forecast housing would begin recovering in 2011, only to see it play out as the worst year for new home sales on records going back a half-century.
Executives at PulteGroup Inc., MDC Holdings Inc., M/I Homes Inc. and Beazer Homes USA Inc. weighed in on the housing market after their companies reported financial results for October to December.
In that period, sales of new homes rose nationally as builders slashed prices to compete with sales of previously occupied homes, including many that had been foreclosed.
Beazer’s and M/I’s sales and new orders rose sharply in the quarter, while trends were mixed for PulteGroup and MDC Holdings.
Only PulteGroup ended the quarter with a smaller backlog of homes under contract than a year earlier, and its backlog fell less than 2 percent. Backlog is an indicator of potential home deliveries and revenue for homebuilders.
So the increases bode well for the spring. But executives were cagey about forecasts.
PulteGroup President and CEO Richard Dugas said it’s still too early to get a read on whether spring will be a boon or a bust — though he was pleased with business activity in January and said sales representatives in the field were positive.
“There are reasons to be optimistic about medium — and long-term demand, but it will be interesting to see how 2012 develops,” Dugas said in a conference call with Wall Street analysts.
At MDC Holdings, where new home orders jumped 30 percent in January, Chairman and CEO Larry Mizel said positive signs lead him to conclude the industry has stabilized and may begin to recover this year. That’s may — not will.
At Atlanta’s Beazer Homes, customer traffic has been on the rise, reflecting what its president and CEO, Allan Merrill, sees as “significant pent-up demand for new homes forming in many of our markets.”
Merrill noted during a conference call that, even as mortgage interest rates remain near record lows, that demand hasn’t translated into sales. Still, Beazer expects to close more homes in fiscal 2012 than it did last year.
Uncertainty over the economy, high unemployment and concerns that home prices have yet to hit bottom are keeping many prospective homebuyers on the sidelines. Builders also are struggling to compete with cheap foreclosures.
Here’s how the individual companies fared in the October-to-December quarter:
• PulteGroup, based in Bloomfield Hills, Mich., earned $13.8 million, or 4 cents a share, compared with a loss of $165.4 million, or 44 cents a share, in the same period a year earlier. Analysts expected adjusted earnings of 7 cents per share, according to FactSet.
Revenue increased 6 percent to $1.26 billion from $1.19 billion, beating Wall Street’s $1.13 billion.
Pulte shares ended regular trading down 8 cents to $7.75.
• Denver-based MDC Holdings’ loss narrowed to $18.8 million, or 40 cents a share, compared with a loss of about $30 million, or 65 cents a share, a year earlier. The latest results included charges of $20.2 million related to paying off debt and $2.7 million from asset write downs.
Analysts were expecting, on average, a loss of 50 cents a share on $257.6 million in revenue. MDC Holdings’ revenue fell 5 percent to $247.4 million.
MDC shares gained $1.99, or 9.8 percent, to $22.40 in regular trading.
• Atlanta’s Beazer reported net income of $739,000, or a penny a share, compared with a loss of $48.8 million, or 66 cents a share, a year earlier. The latest results included a tax gain of $35.7 million and a one-time charge of $3.5 million. Revenue surged 73 percent to $188.5 million.
Analysts expected a loss of 36 cents on $207.8 million in revenue, according to FactSet.
Beazer shares added 8 cents, or 2.5 percent, to $3.25 during the regular session.
• M/I Homes, based in Columbus, Ohio, lost $3 million, or 16 cents a share, compared with a loss of $11.1 million, or 60 cents a share, a year earlier. The latest results included $4.5 million in charges related to asset write downs.
Revenue climbed to $176.8 million from $165 million a year earlier.
Shares ended regular trading up 16 cents to $12.81.
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