Beazer Homes USA Inc. (BZH) swung to a fiscal second-quarter
profit as the home builder was aided by a gain related to a note
exchange, while it reported a 49% order surge and a lower
cancellation rate.
But shares declined 7.6% to $6.36 in after-hours trading,
despite the better-than-expected results.
"We have been encouraged by the early signs of improvement in
our business, which started" in the fall and have continued since,
said Chairman and Chief Executive Ian McCarthy. "We recognize both
the signs of improvement and the continued risks to a broad-based
housing recovery, but we expect to see gradual improvement over
time."
McCarthy in February said the company was seeing indications
that its markets may be improving as home affordability,
stabilizing prices, low interest rates and tax credits may be
helping to balance out the fears of prospective buyers. Standard
& Poor's Ratings Services last month raised Beazer's rating,
saying the company's constrained liquidity profile had improved and
sales trends were looking up.
Housing-related data have been mixed in recent months, signaling
an industry that is limping back to life as several homebuilders
have begun to report profits, helped by tax benefits.
For the quarter ended March 31, Beazer reported a profit of $5.3
million, or 9 cents a share, compared with a year-earlier loss of
$114.9 million, or $2.97 a share. The latest results included $19
million in write-downs, more than offset by a $53.6 million gain
related to a notes exchange. The year-earlier results included
$51.2 million in inventory and investment write-downs.
It was the third consecutive quarter that Beazer posted a
profit.
Revenue jumped 6.2% to $198.2 million.
Analysts polled by Thomson Reuters had most recently forecast a
loss of 62 cents on $194 million in revenue.
Gross margin rose to 13.1%, compared with negative 11.9% a year
ago amid the write-downs.
The builder's cancellation rate fell to 17.6% from 29.8% a year
ago. Closings increased 5.6%.
-By Nathan Becker and John Kell, Dow Jones Newswires;
212-416-2855; nathan.becker@dowjones.com