D.R. Horton (DHI - commentary - Cramer's Take) is expected to announce its second-quarter 2008 results before the market opens and follow up with its quarterly conference call later that morning. Centex (CTX - commentary - Cramer's Take) was the most recent homebuilder to report its earnings (last week), and that company had no words of encouragement for the beleaguered sector.
Despite the downbeat results from the homebuilders, however, as a group, these stocks are trading higher on lower interest rates and hopes for a bottoming out in new home sales. The SPDR S&P Homebuilder (XHB - commentary - Cramer's Take) is up nearly 50% from the January lows, while D.R. Horton, itself, is nearly 60% higher during the same period of time.
As to the numbers, D.R. Horton is expected to lose 43 cents per share on sales of $1.36 billion. In the year-ago quarter, the company earned 16 cents per share on sales of $2.62 billion. Frankly, given the uncertainly in write-offs and impairments, the EPS loss is most likely to vary greatly from the analysts' consensus estimates.
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homebuilders PHM Does Not Look Promising 4/24/2008 12:17 PM EDT The homebuilder reported a loss of $2.75 per share on $1.448 billion in revenue.
homebuilders Fire Sales and Squeezed Margins at CTX 5/1/2008 1:34 PM EDT The company reported a deepening of both fourth-quarter and year-end 2008 losses.
homebuilders CTX Preview: Misery Loves Company 4/30/2008 3:30 PM EDT The company is expected to report a loss of $2.43 per share on $2.20 billion in revenue.
At the time of publication, Rothbort had no positions in the stocks mentioned, although positions can change at any time.
Scott Rothbort has over 20 years of experience in the financial services industry. In 2002, Rothbort founded LakeView Asset Management, LLC, a registered investment advisor based in Millburn, N.J., which offers customized individually managed separate accounts, including proprietary long/short strategies to its high net worth clientele. He also is the founder and manager of the social networking educational Web site TheFinanceProfessor.com.
Immediately prior to that, Rothbort worked at Merrill Lynch for 10 years, where he was instrumental in building the global equity derivative business and managed the global equity swap business from its inception. Rothbort previously held international assignments in Tokyo, Hong Kong and London while working for Morgan Stanley and County NatWest Securities.
Rothbort holds an MBA in finance and international business from the Stern School of Business of New York University and a BS in economics and accounting from the Wharton School of Business of the University of Pennsylvania. He is a Term Professor of Finance and the Chief Market Strategist for the Stillman School of Business of Seton Hall University.
For more information about Scott Rothbort and LakeView Asset Management, LLC, visit the company's Web site at www.lakeviewasset.com. Scott appreciates your feedback; click here to send him an email.
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