SCOTTSDALE, Ariz. (AP) — Meritage Homes posted broader fourth-quarter losses Tuesday, with the cost of exiting the troubled Las Vegas market offsetting higher revenue from improved home closings.
Home closings rose 7 percent in the October-December quarter versus a year earlier. New home orders grew 5 percent.
Yet the results still fell well short of Wall Street expectations and shares tumbled 11 percent on the same day that the Standard & Poor's/Case-Shiller home-price index showed that U.S. home prices fell for a third straight month in nearly all cities. Sares of all major homebuilders gave up between 1 percent and 3 percent.
Meritage reported a loss of $11.8 million, or 36 cents a share, for the three months ended Dec. 31. That compares to a loss of $900,000, or 3 cents a share, in the prior-year period.
The latest results included $13.9 million in charges, with $9.2 million coming from winding down operations in Las Vegas.
Total revenue grew to $246 million from $214.6 million a year earlier.
Analysts, on average, had expected earnings of 3 cents a share on $250.6 million in revenue, according to FactSet.
Sales of new homes picked up in the last three months of 2011 for Meritage, but the year still marked a new low point for new-home sales, based on figures dating back nearly half a century. The annual pace of sales of homes in December was less than half of the 700,000 that economists say would be sold in a healthy economy.
Uncertainty over the economy, high unemployment and concerns that home prices have yet to hit bottom are keeping many prospective homebuyers on the sidelines. Builders also are struggling to compete in a market rife with homes in foreclosure.
Meritage, which sells homes in seven states, said new home orders totaled 749 units in the fourth quarter, while closings rose to 894. Sales increased most in Florida, California and Arizona.
The builder's average home closing price increased 13 percent to $275,000. The increase was due to a greater portion of sales in California, Arizona, Colorado and Florida, where prices are generally higher.
The builder's backlog — a key indicator of future revenue — totaled 915 homes at the end of the quarter. That's up 18 percent from the end of 2010.
"Considering that we're entering the year with a larger backlog than we had last year, and have recently added new divisions in Raleigh and Tampa, I am confident we can grow our sales, revenue and earnings in 2012," Chairman and CEO Steven Hilton said.
The Standard & Poor's/Case-Shiller home-price index showed Tuesday that U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. Prices in Atlanta, Las Vegas, Seattle and Tampa fell to their lowest points since the housing crisis began. Prices have fallen 33 percent nationwide since the housing bust, to 2003 levels.
Shares of Meritage Homes Corp. fell $2.92 to $24.24 in midday trading. The stock has ranged between $13.68 and $28.25 over the past 52 weeks.
There are no comments yet