The numbers are down for Centex Corp., and in certain areas of the business, they are going to decline further.

CFO Cathy Smith said during the company's 3Q2008 earnings call Feb. 4 that the company is moving fast to centralize its mortgage arm, focusing more on its core home building business. To date, $43 million has been expensed for the centralization process and another $5 million to $10 million is expected to be expensed in the fourth quarter.

The company reported a 53% decrease in home building revenue to $843 million from 3Q2007 and an operating loss of $14 million in the financial services sector, which was narrowed from a loss of $60 million in 3Q2007.

Along with cutting back on the mortgage side, the company also projected a staff reduction of 70% from the beginning of the fiscal year, 30% of which was achieved in the third quarter.

Centex CEO Tim Eller said that while markets such as Texas, the Carolinas, and Washington, D.C., are still strong, California, Florida, and desert markets are hitting lower numbers. While consolidation of offices has occurred and will continue to occur, Eller said Centex will maintain a presence in some of the weaker markets for in order to capitalize on their eventual recovery.

Home closings were down 49% for the company in 3Q2008--from 6,657 in 3Q2007 to 3,405--a result of a lack of consumer confidence, economic concerns, and the need for home buyers to sell an existing property, according to Eller. Centex offered incentives of an interest rate buydown to 4.5% on a 30-year fixed mortgage, which Eller said was intended to grab the attention of potential buyers--a tactic he felt was working.

Sales were extremely slow early in the quarter, but Eller said momentum returned in December and continued into January, allowing the company to protect its backlog, which currently sits at 4,600 units worth $1.2 billion.

Protecting backlog is vital to the company's strategy, which also includes building through land owned, according to Smith.

"We will continue to take the same disciplined approach," Smith said with respect to the upcoming quarters. "The best answer is to build through our assets, [resulting in a] leaner balance sheet [and] faster returning, higher-yield assets in the future."

Centex also reported a net loss of $664 million for 3Q2008, compared to a loss of $976 million in 3Q2007. The loss included $590 million of impairments and land-related charges, including Centex's share of joint venture impairments, compared to $554 million of impairments and other land-related charges for the same period a year ago. Smith said that 127 neighborhoods, about half of the company's total, have been impaired thus far, adding that roughly 25% of the impairments come from land that is currently held or not in production.

Eller said the company will stick to its strategy of pre-selling, holding two to five spec homes per community, and building to a cadence. Moving forward, he said the copmany hopes to be cash flow positive in 4Q2008 and to emerge from this downturn in FY2010 as one of the winners.