I dont know, I thought these homebuilders were going to see improvements, I mean didnt greenspan and the other talking heads said things were looking better, Hmmmm, I think not. haah continue to short. Centex sees quarterly loss Home builder estimates $450 mln in land-related charges BOSTON (MarketWatch) -- Centex Corp. warned Tuesday it expects to post a loss from continuing operations in its fiscal third quarter as the company grapples with "one of the most challenging housing environments in the past 25 years." The Dallas-based home builder (CTX : Centex Corporation News , chart, profile, more Last: 51.67-1.49-2.80% 1:11pm 01/16/2007 Delayed quote data CTX51.67, -1.49, -2.8% ) said it anticipates reporting a loss from continuing operations of about $2 a share for the quarter ended Dec. 31 on land charges, lower orders and a tax provision adjustment. In response to a tough housing market, Chief Executive Tim Eller in a statement said the company is "reducing our land position and inventory, aligning our workforce to the current sales pace, and improving our overall cost structure." Chart of CTX Centex said it closed 8,360 homes during the quarter, a 12% drop from a year earlier, while net sales orders decreased 24% to 6,139 homes. The company said it expects to take quarterly charges of $150 million related to options on land it's walking away from. It plans to book land-valuation adjustments of about $300 million, with about $100 million coming from joint ventures. Centex said it has cancelled or intends not to exercise land-option contracts on about 37,000 lots, citing slowing housing activity in many of its markets. The stock lost 2.6% to $51.77 Tuesday afternoon. Additionally, Centex said it is increasing its provision for taxes by roughly $60 million in connection with an ongoing tax audit disclosed previously. Before the adjustments, the company said it expects quarterly earnings to be about 75 cents a share. Analysts surveyed by Thomson First Call had been forecasting, on average, net income of 81 cents a share for the quarter. In October, Centex forecast per-share income from continuing operations of 90 cents for the third quarter. "We're committed to reducing inventory, generating cash and strengthening our balance sheet," CEO Eller said Tuesday. The company's preliminary third-quarter results "reflect continuing housing market challenges, belying the notion that the housing market has already turned a corner," wrote Deutsche Bank analyst Nishu Sood in a note Tuesday. "The company's announcement is a familiar mix of earnings below expectations, orders that continue to fall and ongoing asset impairments," Sood said. Yet the analyst added the 24% quarterly order decline was in line with expectations and better than peers, "due to the company's better relative geographic exposure and some discounting to move inventory." Centex is scheduled to release full results for the quarter on Jan. 23. Also Tuesday, residential builder KB Home (KBH KBH48.81, -0.54, -1.1% ) in a filing said it expects to take quarterly charges of about $88 million on abandoned land-option contracts, and $255 million in charges related to land inventory impairments. The expected charges are for the quarter ended Nov. 30. Meanwhile, shares of builder WCI Communities Inc. (WCI : WCI Communities, Inc News , chart, profile, more Last: 23.21+2.19+10.42% 1:11pm 01/16/2007 Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by: WCI23.21, +2.19, +10.4% ) were up more than 10% at last check after billionaire financier Carl Icahn in a regulatory filing said he's increased his stake in the company, and has accumulated about 14.6% of the company's outstanding shares. Icahn said he plans to contact the company to get its views "on how to unlock the inherent value of the shares." Home-builder stocks could see plenty of action this week. Lennar Corp. (LEN : Lennar Corporation News , chart, profile, more Last: 49.22-0.93-1.85% 1:11pm 01/16/2007 Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by: LEN49.22, -0.93, -1.9% ) , the nation's third-largest home builder measured by 2005 deliveries, is expected to report quarterly earnings Wednesday morning. Earlier this month, the company said it expected to post a fourth-quarter loss. See previous story. Also this week, the National Association of Home Builders is expected to release its monthly confidence index. Finally, the Commerce Department is slated to report December housing starts and building permits on Thursday. Economists expect housing starts to slip 0.8% to 1.575 million units after rising 6.7% in November. Home-builder stocks have recovered since July after falling much of 2006, fueling hopes that housing has bottomed since the stocks tend to bounce back before the market itself. Yet not everyone is convinced. "I expect more write-offs at the home builders and the stocks will hit new bottoms," said Peter Schiff, president of Euro Pacific Capital. "There's not enough demand with speculators leaving the market, and it will be a while before it makes sense to build homes." End of Story
The pain has barely started. 2007 will be worse than 2006. The NAR of course would have you believe otherwise. They have implemented a $40 million national advertising campaign to get people to buy homes. They state we are now at the bottom, perfect time to buy. What do you think they really believe if they have to advertise to get people off the sidelines? They are shakin in their booties.
I said back in December that any proclamations that housing had bottomed were so far off they were grossly negligent. The reality is housing literally won't bottom until (probably) 2009 - and maybe later than that. Centex just let go of 37,000 lots. That is literally about the supply of lots they would have needed for the year 2005, which was the top of the market. So, they just walked away from what is now about a 1.5 year or 2 year supply of lots. That's how bad sales are.
TV in SF Bay Area was showing today that 1 million dollar condos are being built in Down Town of Walnut Creek, California. 40 percent of them have been sold. Strange that it's still hot there.