Back in October, we took a look at marketing initiatives that the top five national home builders are employing to improve their bottom line. Through this mini audit we saw a large social media presence, increased green features and creative partnerships, to name a few.
Since that time, we’ve seen Toll Brothers take over the title of largest volume builder, the Pulte-Centex “combination” and the emergence of new players to the big show, including NVR and MDC Holdings.
Home builders were also thrown the proverbial bone, with the extension of the first-time homebuyer tax credit, which was to expire in November but saw an eleventh hour extension and add on of $6,500 credit as incentive to existing homeowners.
In this installment, we’re going to take a quick look at the financial performance of the nation’s top builders entering the new decade.
According to analysis on Investopdia, “The company’s loss of 68 cents a share (in fiscal fourth quarter) was a result of continued asset write-downs, namely land holdings. Sales for the quarter were down 30% from $691 million to $486 million. Analysts had expected write-downs to lead to a loss of 46 cents a share based on revenue projections of $450 million.”
On the flip side, Toll enjoyed a 42 percent jump in new sales. In a recent article from Bloomberg, Toll attributes the healthy sales bump to selling properties in fewer communities, building up cash reserves and writing down the value of inventory to improve liquidity.
Fourth-quarter revenue slumped 44 percent to $1 billion. The builder’s net loss for the three months ended Sept. 30 narrowed to $231.9 million, or 73 cents a share.
However, as reported Monday, “compensation for D.R. Horton Chairman Donald R. Horton and Chief Executive Officer Donald J. Tomnitz climbed by 56 percent in fiscal 2009, a year when the second-largest U.S. homebuilder reported a net loss of $545.3 million.” Hmmm…
AP Photo/Tony Gutierrez
Learning Markets reports, “Pulte Homes Inc. (PHM) delivered its earnings announcement on 11/04. The company reported a change in quarter-over-quarter sales of -29.98% and posted an EPS (trailing twelve months) of -5.25.”
“Since the PHM announcement (about 30 days ago), the stock has posted a -1.73% gain (loss). Over that same period, the stock’s industry, Residential Construction, saw a -2.44% gain (loss).”
There have been major changes in the industries landscape to affect standing and sales. It’s going to be exciting to see how the tax credit continues to affect sales, which builders consolidate further and overall, who wins the battle of the first quarter.
So are you buying or selling?
Tags: D.R. Horton, first-time homebuyer tax credit, national home builders, Pulte Homes, Pulte-Centex, Toll Brothers