UPDATE: Beazer Swings To 1Q Loss As Closings, Orders Plunge

Builder Beazer Homes USA Inc. (BZH) swung to a fiscal first-quarter loss as closings and revenue plunged in the absence of a federal tax-credit for buyers.

The results, which several analysts said were among the weakest reported in the latest earnings season, dragged shares down more than 4% to $5.21 in early trading. The Atlanta-based company was, by far, the sector's biggest decliner.

Like most builders, Beazer is struggling to sell homes to buyers worried about employment and in a market brimming with bargain-priced foreclosed homes. Sales have been particularly slow since a federal credit offering first-time buyers up to $8,000 expired April 30.

"Conditions remained very challenging in the home building sector during our first quarter," Chief Executive Ian J. McCarthy said in the pre-market release. "Despite low interest rates and excellent home price affordability, demand for new homes remained at exceptionally low levels."

For the quarter ended Dec. 31, Beazer reported a loss of $48.8 million, or 66 cents a share, compared with a year-earlier profit of $48 million, or $1.17 a share. In addition to the tax benefit, the year-earlier result included $8.6 million in writedowns. Revenue plunged 48% to $110.3 million.

Analysts polled by Thomson Reuters most recently forecast a 46-cent loss on $164 million in revenue.

Home building gross margin, excluding writedowns and abandonments, fell to 10.7% from 12.5%. The cancellation rate increased to 32.1% from 27%, possibly indicating more buyers walked away from deals. The average sale price was unchanged. New orders fell 24%.

Closings dropped in each of the company's three regions, tumbling 45% in the West and 41% and 44%, respectively, in the East and Southeast.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com

Beazer Homes USA (NYSE:BZH)
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