All things relative, considering the environment, Pulte Homes' third-quarter earnings released late Wednesday were positive. The company would have actually turned a profit of 21 cents-per-share if it hadn't been for $1.18 billion, or $3.33-a-share for impairments and land-related charges and goodwill writedowns.

After those charges were subtracted, the company reported a loss of $787.9 million or $3.12 a share.

That's better than the company executives expected.

"In the midst of these conditions, in the third quarter we were profitable on a pre-impairment basis, which exceeded the higher end of the guidance we previously provided of 10 cents to 20 cents per diluted share, exclusive of impairments or land related charges," said CEO Richard J. Dugas Jr.

The company was also happy to announce it was able to slightly improve its cash position to $102 million and reduce debt in its revolving line of credit by $148 million, despite the difficult environment.

Still, the third quarter of 2007 was markedly worse than third quarter 2006, when Pulte was still finishing out sales made before the downturn. Revenues from home sales decreased 31% to $2.4 billion compared with $3.5 billion same quarter last year. The change in revenue reflects a 28% decrease in closings to 7,468 homes and a 4% decrease in average selling price to $322,000.

For the nine months ending Sept. 30, Pulte reported a loss of $1.38 billion, or $5.48 a share, compared to income in the same period of 2006 of $697.9 million, or a gain of $2.70 a share. Consolidated revenues for the nine months were $6.4 billion, down from $9.9 billion last year.

New-home orders for the third quarter were 4,582 and valued at $1.3 billion, which is a decline of 37% and 47% respectively from last year. The company ended the quarter with $4.1 billion (12,042) homes in backlog compared to $5.8 billion (6,375 homes) at the end of last year's third quarter.

Pulte has also been able to decrease its SG&A expenses by 15% from the same quarter last year, but that was not fast enough to keep up with falling sales prices. It increased as a percentage of home sale revenues to 9.8% compared to 8% last year.

There was a big enough backlog and a decrease in costs to give the company the confidence to offer guidance for the fourth quarter of 2007.

"In part due to our relatively strong backlog position, combined with our lower overhead spending, for the fourth quarter of 2007 we are projecting income from continuing operations in the range of break-even to 10 cents per share," said Dugas. Of course that estimate does not include any land related charges or impairments to land and goodwill that could occur.

"Due to the lack of longer-term earnings visibility and the difficult market conditions that persist, we are not at this time providing guidance for any period beyond the fourth quarter of this year," he said.