Skip to main content

Beazer Drags On Hombuilder Stocks

Beazer Homes says new-home orders this year may not be higher than last year, sending stocks in the homebuilder sector lower.


ATLANTA, Ga. (TheStreet) -- Beazer Homes (BZH) - Get Beazer Homes USA, Inc. Report was among the biggest laggards on the New York Stock Exchange Wednesday after the homebuilder said it was no longer sure new-home orders in fiscal 2010 would be higher than fiscal 2009's level of 4,205 homes.

Beazer shares dropped 5.5% in morning trading to $4.29 on heavier-than-normal trading.

Beazer cited slower-than-anticipated improvements in new-home orders after the expiration of the extended

federal tax credit for homebuyers

.

>>Beazer Homes: Hard Times Ahead

.

The company said prospective homebuyers continue to exercise caution in committing to a home purchase as general economic conditions still haven't showed enough improvement.

>>Top Homebuilder Stocks to Buy Now

.

"Based on sales results through September 15th, the company now expects that new-home orders will be between 700 and 800 homes for the fourth quarter of fiscal 2010, resulting in year-over-year new-home orders that may be above or below fiscal 2009 results," Beazer said.

Beazer reported 3,438 orders for new homes through June 30, meaning the company expected fourth-quarter new-home orders of at least 767 homes, the company explained.

>>New-Home Sales: Winners & Losers

.

Beazer said fiscal 2010 land and land development spending would be less than $200 million after previously forecasting it to be in a range between $200 million and $220 million.

TheStreet Recommends

Still, Beazer estimated home closings from continuing operations for fiscal 2010 to be about 4,600 homes, which would be a modest improvement over the 4,330 homes closed in fiscal 2009. The builder also reconfirmed expectations that fiscal 2010 gross margins will be higher than comparable fiscal 2009 gross margins of 11.7%, and that its cash balance at the end of September will be in excess of $500 million.

The housing market saw sales ramp up in March and April as consumers rushed to take advantage of tax credits that offered as much as $8,000 for first-time homebuyers and $6,500 for repeat buyers. Following the expiration of those credits on April 30, the market saw a dramatic decline in demand for the month of May that spilled over into June. Data for July showed a further drop in demand. Lawmakers later extended the deadline to close on a home purchase and still qualify for the tax credit to Sept. 30.

>>We Need Another Homebuyer Tax Credit, Poll Says

.

Elsewhere in the homebuilder sector stocks were mostly lower. The

SPDR S&P Homebuilders

(XHB) - Get SPDR S&P Homebuilders ETF Report

, an exchange-traded fund, fell 0.9%. The

iShares Dow Jones US Home Construction

(ITB) - Get iShares U.S. Home Construction ETF Report

lost 1.2%.

D.R. Horton

(DHI) - Get D.R. Horton, Inc. Report

lost 1.4%,

PulteGroup

(PHM) - Get PulteGroup, Inc. Report

2.4% and

Lennar

(LEN) - Get Lennar Corporation Class A Report

1.4%.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here:

Miriam Reimer

.

>To follow the writer on Twitter, go to

http://twitter.com/miriamsmarket

.

>To submit a news tip, send an email to:

tips@thestreet.com

.

RELATED STORIES:

>>Top Homebuilder Stocks to Buy Now

>>Home Prices Rise 4.4% in June

>>Existing-Home Sales: Winners & Losers

>>We Need Another Homebuyer Tax Credit, Poll Says

>>See our new stock quote page.

Get more stock ideas and investing advice on our sister site,

Stockpickr.com.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.