The traditional spring selling season can't come quickly enough for builders like Beazer Homes USA Inc., following the worst year for new home sales on record.
The company reported Tuesday that it slid to a loss in the fiscal first quarter as home closings and contracts for new homes fell sharply. Its results for the October to December period were worse than expected.
But President and CEO Ian McCarthy said sales trends last month perked up considerably, echoing other large homebuilders that have given guarded optimism in recent weeks about the prospect for improving fortunes this spring.
"I'm very encouraged with what we've seen in January so far and we're looking for a strong February and March," McCarthy said. "It will be very critical to us."
McCarthy said new home orders in January climbed by more than 50 percent from December and posted a comparable increase versus January 2009.
The builder doesn't anticipate it will match the level of home orders in the second quarter that it generated last year, when federal tax credits helped boost home sales before expiring in April.
But McCarthy does expect to put up bigger home sales numbers in the second half of this year than in the last six months of 2010, when sales tanked following the end of the government incentives.
"We fully expect to beat that performance this year," he said.
Anything short of that might signal even deeper doldrums for new home sales, which sank last year to the lowest levels since at least 1963.
While sales improved in November and again in December, it wasn't enough to lift results for many large homebuilders.
In recent weeks, KB Home, Lennar Corp., D.R. Horton Inc., Standard Pacific Corp. and PulteGroup Inc. all reported sharp drops in home deliveries and contracts for new homes during their latest quarters.
Meritage Homes Corp. bucked that trend, reporting a 15 percent jump in new home orders, but the increase appears to have been fueled by heavy discounting. And its home deliveries sank 30 percent.
For its quarter, Atlanta-based Beazer saw home closings plunge 43.6 percent to 527 homes, while new orders fell 23.9 percent to 540 homes.
The lackluster sales helped push the homebuilder back into the red in its fiscal first quarter ended Dec. 31.
The company reported a loss of $48.8 million, or 66 cents per share, compared with a profit of $48 million, or $1.17 per share, a year earlier.
Revenue fell 48 percent to $110.3 million from $213.1 million.
The results were worse than expected. Analysts surveyed by FactSet forecast a loss of 50 cents per share on revenue of $163.7 million.
Beazer is one of the nation's 10 largest builders of single-family homes and has operations in 16 states.
Like other builders, the company is struggling to woo buyers at a time when many are hesitant to purchase a home amid high unemployment, tight credit and uncertainty about home prices.
A glut of sharply discounted foreclosed properties continues to both compete for buyers and drive down prices.
McCarthy said that the company isn't trying to chase sales by offering large discounts on its homes, but conceded that it won't be able to avoid doing so in select communities where competition is heated.
The builder also is stepping up its land acquisition and development as it moves to open additional communities this year.
Beazer's stock added 14 cents to close at $5.59 Tuesday. Over the last year, the shares have traded between $3.10 and $7.08.
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