Home builder Centex Corp. on Tuesday reported that “serious disruptions” in the mortgage and credit markets contributed to a net loss of $643.8 million in the second quarter ended Sept. 30, compared with net earnings of $137.4 million in second-quarter 2006.
The net loss for the quarter amounted to $5.26 per diluted share.
“Market conditions were extremely challenging during the quarter, reflecting the serious disruptions in the credit and mortgage markets that occurred during that period,” said Tim Eller, Centex chairman and CEO, in a statement. “In response, we meaningfully reduced prices in order to improve affordability for our home buyers.”
The company reported second-quarter home-building revenues of $2.11 billion, down 21 percent compared to the same quarter last year. That is due in part to a 14 percent decline in closings. The company also reported an 8 percent decrease in the unit average sales price and a 13 percent decline in orders compared to second-quarter 2006.
Several other builders are scheduled to report quarterly earnings this week, including Pulte, MDC, Ryland and Standard Pacific.
Last month, KB Home reported a $35.6 million loss for the third quarter ended Aug. 31, compared with net earnings of $153.2 million for that quarter last year. And builder Lennar Corp. in September reported a $513.9 million quarterly loss, compared with net earnings of $206.7 million for the same quarter last year.
For the six-month period ended Sept. 30, Centex reported a $771.8 million net loss, compared with $297.7 million in net earnings for the same period last year.
Home-building revenues during that period totaled $3.91 billion, 26 percent lower than during the same period last year. The building cancellation rate for the second quarter was 35.4 percent.
Centex managers will conduct a conference call at 10 a.m. EDT today to discuss the earnings reports. The conference call, accompanied by a slide presentation, will be broadcast on the Centex Web site at www.centex.com. A replay of the call, as well as the presentation, will be archived on that site, the company reported.