Home sales orders fell further than Beazer Homes USA executives had expected after the federal tax credit expired, causing the company to change its sales order predictions.
Beazer Homes USA's 2010 home sales orders may not exceed 2009's numbers, contrary to guidance the company had offered earlier in the year, the company has announced. The company, which has a Sept. 30 fiscal year end, had said it expected sales in 2010 to be greater than the 4,205 houses it sold last year.
Beazer needs to sell 767 houses in its fourth quarter to exceed last year's total sales, but as of Sept 15 the company announced orders will be between 700 and 800 resulting in year-over-year new home orders that may be above or below fiscal 2009 results, the announcement said. "This revised expectation reflects a slower-than-anticipated improvement in new home orders after the expiration of the extended First-Time Homebuyer Tax Credit which ultimately expired in April 2010."
Closings, however, are expected to be greater than last year: approximately 4,600 versus 4,330 last year, the company said. Gross margins, also are expected to improve over FY 2009's 11.7%.
Beazer also announced it is reducing its spending on land and land development for the quarter, which will result in its spending less than $200 million for the year. It had expected to spend between $200 and $220 million.
"The company owns or controls over 25,000 lots and is primarily pursuing land opportunities for Fiscal 2012 and beyond. As such, the company currently has significant discretion over the timing and magnitude of its land and land development spending," the announcement said.