reported a $644 million loss for its second quarter as the plummeting housing market forced the homebuilder to record nearly $1 billion of land impairment charges.
Analysts had expected the quarter to be ugly, since Centex
had already announced the massive impairments earlier this month.
Centex, like other homebuilders, is facing stiff competition to sell new homes. Across the industry, builders are cutting prices to clear excess inventory. Such a scenario leads to increased impairment charges, since inventories on builder balance sheet are no longer profitable.
Centex recorded a loss from continuing operations of $644 million, or $5.26 a share, for the second quarter ended Sept. 30 compared with a profit of $80 million, or 65 cents a share, a year earlier. Analysts expected a loss of $3.26 per share, according to Thomson Financial.
Centex's revenue for the quarter tumbled 21% to $2.22 billion.
New sales orders fell 13% on a unit basis. The company also had an 8% decrease in average sales prices, as well as higher sales incentives.
"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. These actions were consistent with our continued focus on selling homes and generating cash as we structure for profitability," Eller said.