Beazer Homes Sharply Narrows Its 3Q Loss

Beazer Homes USA Inc. said Thursday it cut its fiscal third-quarter loss sharply, largely because of a gain from a reduction in its debt load, and the homebuilder noted new home order trends showed signs of improvement.

But the Atlanta-based company's revenue sank by more than half, due to a 43 percent decline in home closings and a 9 percent drop in the average selling price.

Beazer lost $28 million, or 72 cents per share, in the three months ended June 30. That compares with a loss of $109.8 million, or $2.85 per share, in the same period a year earlier.

The latest results included a $55.2 million gain after the company took steps to reduce its debt.

Revenue declined 51 percent, to $224.7 million from $455.6 million.

Analysts polled by Thomson Reuters were expecting a loss of $1.53 a share on revenue of $225.7 million.

During a conference call with Wall Street analysts, Beazer Chief Executive Ian McCarthy said low interest rates, tax incentives and more affordable homes helped spur the traditional seasonal pickup in sales during the quarter.

He also said a promotion in June that highlighted environmentally friendly features in the company's homes was a success.

"We are encouraged by signs that some housing market trends may be moderating both at the local and national level and further encouraged by our improvement in sales," McCarthy said, adding he expects orders over the next two quarters to be positive when compared to the same periods last year.

Still, the executive noted that the recession and rising levels of unemployment make it hard to predict a housing turnaround.

Beazer said completed home sales totaled 950, down from 1,677 in the year-ago period.

The cancellation rate improved to 23 percent from 29.8 percent in the previous quarter and 36.8 percent a year ago.

New home orders totaled 1,537, down 13.4 percent from a year ago, but up 36 percent since the March quarter.