After the stock markets closed on Election Day, homebuilder D.R. Horton Inc. warned investors that it expected to lose up to $900 million in its fourth quarter -- about 18 times more than in the prior-year period.
Homebuilder Horton says loss might hit $900 million
November 5, 2008 at 2:48AM
The nation's largest homebuilder projected a loss for the quarter ended Sept. 30 of between $800 million and $900 million, including an expected tax benefit of $350 million. That works out to about $2.53 to $2.84 a share.
Analysts had been expecting a loss of 58 cents a share on revenue of about $1.6 billion when D.R. Horton reports its financial results on Nov. 25, according to a poll by Thomson First Call.
"I expected things to be weak, given the other builders that reported recently, but I didn't expect things to be this weak," said Robert Stevenson, an analyst with Fox-Pitt Kelton.
He was particularly concerned by the spike in canceled home orders, which rose to 47 percent from 39 percent in the second quarter.
"I'm pretty sure that's the worst that we've seen" among the major builders, Stevenson said.
In the year-ago period, D.R. Horton lost $50.1 million, or 16 cents a share.
D.R. Horton projected revenue for the quarter would fall by half to $1.5 billion, reflecting steep declines in home sales and new orders.
The Fort Worth, Texas-based builder expects to book $1.1 billion in pretax charges on inventory and land-related assets, and an additional pretax impairment charge of $80 million.
"We remain focused on controlling our cost structure, reducing our inventory and generating cash flow from operations," Chairman Donald R. Horton said in a statement.
Horton expects to generate positive operating cash next year and to receive a federal income tax refund of $600 million to $625 million next month.
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