Centex Corporation (NYSE: CTX) after market close Tuesday reported a loss from continuing operations of $202 million for the company's fiscal second quarter ended Sept. 30. The net loss was $172 million ($-1.38 per share) including $29.6 million in earnings from discontinued operations. Analysts were expecting a loss of $0.94 per share.
The loss included $103 million in in write downs and other land related charges for both the company and its share of joint venture impairments, a much lower charge than the Centex took during last year's fiscal second quarter. It also took a FAS-109 $66 million charge to deferred tax assets.
Home building revenues fell 55% to $953 million on a 48% decrease in closings to 3,797 homes and a 12% decrease in average sales price to $247,534. Home building reported an operating loss of $115 million for the quarter, significantly lower than last year's second quarter loss of $953 million.
New orders decreased 54% (down 42% on a per neighborhood basis) to 2,728. The company did not report a cancellation rate for the quarter.
Backlog was down 28% to 6,953 units and backlog value was down 31% to $1.83 billion.
The company cut home building SG&A expenses by 50% ($148 million), or 39% corporation-wide, and reduced debt outstanding by $150 million during the quarter. It ended the quarter with a cash balance of $1.30 billion.
The Financial Services segment reported an operating loss of $44 million for the quarter, down from a loss of $54 million in last year's second quarter. Included in this quarter's loss is $26 million of expenses related to the closing of the retail mortgage business and a $16 million net increase in loan loss reserves. In the quarter, Financial Services completed the sale of its Westwood Insurance Agency subsidiary, producing a after-tax gain of $30 million in discontinued operations.
Centex cut its owned-lot count to 63,311 from 92,035 at the end of last year's second quarter. Its controlled lots also fell to 11,866 from 39,480 at the same time last year.
The Centex community count was down to 523 at quarter's end from 658 last September 30.
"The homebuilding industry continues to grapple with unprecedented economic conditions," said Tim Eller, chairman and CEO of Centex Corp. "Centex has prepared for this kind of environment by building a strong cash position, consolidating operations and significantly shortening the company's land position. We improved our gross margins and generated positive cash from operations despite the extreme weakness in the housing market."