, one of the largest U.S. homebuilders, beat analysts' earnings estimate for its latest quarter and raised its guidance for the full year, based on a strong order backlog.
Centex said net earnings for its fiscal second quarter ended Sept. 30 totaled $335 million, or $2.49 a share, up from $211 million, or $1.61 a share, a year ago. Earnings for the recent quarter were boosted by a tax refund that contributed $28 million, or 21 cents a share, to results. Analysts polled by Thomson First Call expected the company to report earnings of $2.09 for the second quarter.
Centex said second-quarter revenue increased 36% to $2.89 billion, in line with Wall Street estimates. The company's operating margin grew 2.6 points to 15.9% in the current quarter. Home closings increased 17% to 9,157 homes, and orders rose 12% to 9,555. Centex said its backlog rose 19% on a unit basis.
Centex's results were aided by $173 million in land sales and other related revenue, primarily from lot sales in Naples, Fla., and Washington, D.C. The land sales contributed $59 million to operating earnings in the quarter, equaling about 43 cents share.
Stephen East, an analyst with Susquehanna Financial Group, was expecting Centex to post just $25 million in earnings from land sales. He also didn't expect the 21-cents-a-share boost to earnings from the tax refund.
Still, even putting aside those unexpected one-time gains, East says Centex's results looked solid, citing the revenue and order growth.
"If other aspects of their business looked weak, I would look at (the land sales and tax refund gains) a lot more cynically," says East, whose firm does not provide investment banking services to Centex.
Centex raised its fiscal-year earnings guidance to $9.65 to $9.85 a share from its previous projection of $9.10 to $9.35. Analysts, on average, expect earnings of $9.37 a share for the year ending March 30.