 |
|
| View previous topic :: View next topic |
| Author |
Trouble on the Home Front |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
 Posted: Wed Jan 25, 2006 9:14 am Post subject: Trouble on the Home Front |
 |
|
FYI:
--------------------------------------------------------------------------------
Trouble on the Home Front
By Nicholas Yulico
TheStreet.com Staff Reporter
1/25/2006 9:48 AM EST
URL: http://www.thestreet.com/markets/realestate/10263958.html
Homebuilders Centex (CTX:NYSE) and Ryland (RYL:NYSE) both reported strong quarterly earnings, but their new-order numbers, which will drive future growth, look dismal.
Calabasas, Calif.-based Ryland said its net income rose 49% to $162 million, or $3.32 per share, compared to $108.7 million, or $2.17 per share, a year earlier. The results handily beat the consensus $3.12 estimate on First Call.
But Ryland's unit orders fell 5% year-over-year for its latest quarter. The lackluster performance led A.G. Edwards analyst Greg Gieber to cut his rating on Ryland to sell. He also dropped his 2006 EPS estimate to $10.25 from $10.90. In a research note Wednesday morning, Gieber noted that the only area of strength in Ryland's orders came from Texas, where unit sales were up 27%. However, the average selling price in Texas is 36% below the company's average, with equally low gross margins, he said.
"Using our new 2006 EPS estimate, Ryland currently trades at a 7.3 times multiple. That is a 12% premium to the group's current average 2006 multiple of 6.5 times. We don't believe Ryland warrants any premium to the group," Gieber wrote.
Centex, which reported a 30% increase in its quarterly earnings, reported order growth, but it was weaker than analysts expected.
The Dallas-based builder said its new orders rose 4% to 8,128 homes. Sales were strongest in the Southwest, where orders spiked 28% year over year. On the West Coast, orders rose 10%. But orders fell 15% in the Southeast, 8% in the mid-Atlantic and 3% in the Midwest.
"This is not particularly positive to hit only 4%, though we don't know all the details behind it," says Gieber, who was expecting nearly 11% order growth.
Centex said net income rose to $329.3 million, or $2.49 a share, for its fiscal third quarter ending Dec. 31, up from $253.8 million, or $1.91 a share, a year earlier. Excluding discontinued items, Centex posted earnings of $332.7 million, or $2.52 a share. Analysts expected earnings of $2.48 a share, according to Thomson First Call.
Revenue rose 25% to $3.74 billion, shy of analysts forecast of $3.81 billion.
Centex's earnings growth came amid an 18% increase in home closings, which rose to 9,504 units from 8,047, and a 130-basis-point jump in operating margin.
The weak orders will likely be a focus on both companies' conference calls Wednesday morning. Homebuilder Meritage (MTH:NYSE) will also report earnings today at an unspecified time.
The existing home sales data comes out at 10 a.m. EST from the National Association of Realtors. |
|
| Back to top |
|
 |
| Author |
Trouble on the Home Front Replies |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
| Posted: Wed Aug 01, 2007 10:09 am Post subject: |
|
|
| Yes, but we're probably due for another bounce here, but I think there are still more surprises lurking over the next couple of months. The builders are just a small part of a market portfolio, unless you're Bill Miller, of course. |
|
| Back to top |
|
|
dash
Veteran Poster
Joined: 12 Apr 2005
Posts: 473
|
| Posted: Wed Aug 01, 2007 9:59 am Post subject: |
|
|
Yet unlike AHM yesterday, this news isn't dragging markets lower (at least for the moment).
Isn't this the kind of thing which normally happens at inflection points? |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
| Posted: Thu Jul 26, 2007 9:36 am Post subject: |
|
|
D.R. Horton and Beazer Homes report losses:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCgCXXEagtzI&refer=home
| Quote: | ``We don't see a lot of strength in any of our markets currently,'' Donald Tomnitz, D.R. Horton's chief executive officer, said on a conference call. ``Our sales in each month of the quarter were choppy.''
Orders fell 40 percent to 8,559 houses in the quarter from 14,316 a year earlier. The backlog, or homes under contract and not yet sold, was 15,801 houses, down 37 percent from a year earlier. In the year-earlier third quarter, D.R. Horton had net income of $292.8 million, or 93 cents a share.
At Beazer Homes, the company took $123 million in pretax chares for inventory impairments and to abandon land option contracts. Revenue declined 37 percent to $761 million, the Atlanta-based company said today in a statement.
Beazer closed sales on 2,666 homes in the quarter, a 36 percent drop from a year ago. New orders fell 30 percent to 3,055.
The company reduced its backlog of unsold houses by 37 percent. As of June 30, it had 5,952 unsold properties on the ledger with an estimated sales value of $1.69 billion. At the same time last year, Beazer had 9,449 unsold properties valued at $2.85 billion.
Beazer said on July 23 that the U.S. Securities and Exchange Commission has also opened a formal probe to determine if anyone at the company violated securities laws. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
| Posted: Fri Jul 20, 2007 8:09 pm Post subject: |
|
|
Moody's Economy.com says Florida could be in recession as early as October, driven by a huge glut in the local housing market. Obviously, nobody told these folks about the subprime problem and that housing prices have pretty much stopped rising across the US:
http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=a4qa.rYTWyYA
| Quote: | ``Florida is the epicenter for all the problems that exist in the housing industry,'' said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. ``The problems we have now are unprecedented and a lot of people will get burnt.''
Thirty-seven new high-rise condos and 20,000 new units are being built in Miami's 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research & Consulting LLC in Deerfield Beach, Florida. That's the most unsold units since McCabe began tracking sales in 2002.
``Have you been to Miami lately?'' Florida Governor Charlie Crist said at a homebuilders' conference last week in Orlando. ``It's like we have a new state bird: the building crane.'' |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
| Posted: Tue Jun 26, 2007 2:40 pm Post subject: |
|
|
I know an executive at a major builder: three months back he was ridiculing the media; today, he's looking for a new "position." Money came from his "bonus." Bonus has gone bye-bye.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
| Posted: Tue Jun 26, 2007 8:59 am Post subject: |
|
|
Lennar reports "surprising" loss:
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=LEN:US&sid=aP3YBFazXJlA
| Quote: | The net loss was $244.2 million, or $1.55 a share, in the three months ended May 31, compared with net income of $324.7 million, or $2, a year earlier, Miami-based Lennar said today in a statement. Revenue tumbled 37 percent to $2.88 billion, the biggest drop in at least 10 years.
Chief Executive Officer Stuart Miller said he sees no sign of a housing recovery and the Commerce Department reported that purchases of new homes in the U.S. dropped in May. Rising defaults among subprime borrowers and mortgage rates close to an 11-month high are hampering sales even as builders cut prices.
Lennar, the largest builder by revenue, has been quick to start cutting its inventory of land before other builders, said Eric Landry, an analyst at Morningstar Inc. in Chicago. The company has reduced debt, he said.
``They are positioned to exit this downturn, whenever it comes, as a stronger company than when they entered it,'' said Landry, who doesn't own Lennar shares. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7688
Location: Houston, Texas & Los Angeles, California
|
| Posted: Tue May 29, 2007 8:52 am Post subject: |
|
|
Even the optimistic NAHB is stating on the record that housing starts won't return to its peak levels until 2011:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKQoeHb1MraI&refer=home
| Quote: | The inventory of unsold homes is the largest since the Washington-based National Association of Realtors started counting them in 1999 and house prices have suffered the steepest drop since the Great Depression, according to the realtors' group. Defaults and foreclosures also may rise as about $650 billion of loans to subprime borrowers, those with poor or limited credit histories, reset at higher interest rates by 2009.
``I'll break out the champagne a year from now after the resetting of the mortgage rates and defaults come in less than what we're fearful about,'' said Susan Wachter, a real estate professor at the Wharton School at the University of Pennsylvania in Philadelphia. ``For now, for the sake of the wider U.S. economy, the homebuilders have to start clearing out their inventory.'' |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7645
Location: Sunny California
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
