Homebuilder Ryland (RYL) projected a loss for the second quarter and reported a 17% drop in new-home orders for the period.
The company said late Tuesday that it expects to report a loss of $1.25 to $1.35 a share for the quarter ending June 30. Analysts had been expecting a profit of 32 cents a share, according to Thomson Financial.
The expected loss stems from $145 million to $155 million of charges related to inventory impairments and write-offs, Ryland said.
As prices fall for new houses, builders are finding previous land investments are no longer profitable, forcing them to record impairment charges. Ryland said its impairments were associated with projects in Arizona, California, Florida and Nevada.
Ryland said its preliminary orders for the quarter totaled 2,521 units, down 17% from a year earlier. Cancellations were about 34% of gross orders, compared with 36% a year ago.
The report comes on the same day that
posted a 40% plunge in orders for its recent quarter and also
warned of a loss, sending builder stocks sliding.