BZH Beazer Homes USA Inc New

NEW YORK (Dow Jones)-- Beazer Homes USA Inc.'s (BZH) fiscal third-quarter loss widened as the homebuilder saw closings tumble and revenue plunge from a year earlier, leaving some analysts concerned about the builder's dwindling cash supply.

The results continue a sluggish earnings season as home builders continue to struggle in the fifth year of the industry downturn. Last month, NVR Inc. (NVR), long the sector's top performer because it made money during the downturn, said it saw profits slashed by nearly half when compared with a year earlier. Sector titans PulteGroup Inc. (PHM) and DR Horton (DHI) have also recently reported weak quarters.

Builders continue battling weak consumer demand and competition from bargain-priced foreclosures. Mortgages also remain hard to secure as jittery lenders continue turning down many would-be mortgage borrowers.

But Atlanta-based Beazer faced company-specific challenges during the quarter, including the sudden exit of longtime Chief Executive Ian McCarthy in June, just months after he agreed to repay $6.5 million and return company stock as a settlement with the Securities and Exchange Commission.

In the pre-market release, Allan Merrill, McCarthy's replacement, sought to reassure investors worried about the company's cash position.

Available cash on hand was a modest $274.6 million, not including $284 million of restricted cash, down more than $100 million from the previous quarter. The liquidity is "among the lowest in the industry," Vincent Foley, a Barclays Capital analyst, wrote in a client note.

"Our team has demonstrated creativity and resiliency in repairing our balance sheet and improving our operations," Merrill said in the release. "With no significant debt maturities before mid-2015 and a flexible capital structure, we are now applying that same intensity to driving revenue growth as we work to return to sustainable profitability as soon as possible."

For the quarter ended June 30, Beazer posted a loss of $59.1 million, or 80 cents a share, compared with a year-earlier loss of $27.8 million, or 41 cents a share. The year-earlier results include the government's home buyer tax credit, which is now expired.

The current period also includes a net loss of $3.4 million from discontinued operations, while the prior period included a net loss from discontinued operations of $4.4 million.

Revenue slid 46% to $172.8 million. Analysts polled by Thomson Reuters expected a per-share loss of 42 cents on $232 million in revenue.

The home building gross margin, when including writedowns and abandonments, fell to 7.1% from 11.3% in the prior year.

Closings plunged nearly 50% from a year earlier, while orders rose 24%.

The builder's third-quarter cancellation rate fell to 24.3% from 29.3%.

The average selling price increased slightly to $213,000 from $206,000 in the prior year period, largely driven by a mix in homes sold.

"The June quarter proved challenging for Beazer Homes," Foley wrote. "We remain disappointed by the company's lack of profitability."

Shares of Beazer Homes were recently trading at $1.90, down 2.06%.

-By Dawn Wotapka, Dow Jones Newswires; 212-416-2193; dawn.wotapka@dowjones.com

Beazer Homes USA (NYSE:BZH)
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Beazer Homes USA (NYSE:BZH)
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