Charges Bash Pulte Bottom Line
Pulte Homes (PHM) swung to a big third-quarter loss as the homebuilder recorded more than $1 billion in impairments and charges tied to the housing slump.
The Bloomfield Hills, Mich., company recorded a loss of $787.9 million, or $3.12 a share, compared with a year-ago profit of $190.2 million, or 74 cents a share.
The results were hit by $1.18 billion in pretax charges from land impairments, land-related charges and goodwill impairment.
Most builders have been recording such charges since the housing slowdown forced them to slash prices on homes. As a result, they have to mark down the value of land and housing inventory on their balance sheets to reflect that the inventory is no longer profitable. Centex (CTX), for one, also had nearly $1 billion in charges in its most recent quarter.The charges cut Pulte's per-share results by $3.33 a share. Excluding the charges, earnings were above the company's guidance of 10 cents to 20 cents. Revenue slid 31% to $2.47 billion from $3.56 billion a year earlier. Home closings sank 28% to 7,468 homes. "The operating environment continues to be challenged with elevated levels of new and resale home inventory, tightening of mortgage liquidity, and weak consumer sentiment for housing," said Richard Dugas, Jr., president and CEO of Pulte Homes. For the fourth quarter, Pulte said it expects results from continuing operations of break-even to earnings of 10 cents a share, before any charges.
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