Pulte Homes tried to put the best face on a tough year for home builders during a press conference with analysts this morning by pointing out that while the company lost $2.3 billion for 2007, its efforts to reduce inventories and streamline operations left the company with $1.1 billion in cash by year's end.
The big builder lost $893.3 million in the fourth quarter of 2007, a staggering loss compared to the $8.3 million it lost during the same period last year.
"The year 2007 will be remembered as one of the most difficult and challenging for home building in decades," said Richard Dugas, president and CEO of Pulte Homes.
"The challenging market conditions that plagued the home building industry for the first nine months of 2007 worsened in the fourth quarter," Dugas said.
"Levels of new- and existing-home inventory remain elevated, buyer demand for new homes continues to be weak, and mortgage availability is still a problem for many prospective home buyers, however, in the midst of this difficult operating environment we were able to exceed our goal of $1 billion in cash at year-end," he concluded.
Revenues from home building settlements in the fourth quarter decreased 35 percent to $2.8 billion compared with $4.3 billion last year. The change in revenue reflects a 31 percent decrease in closings to 8,714 homes and a 6 percent decrease in the average selling price of $319,000.
For the year, home building settlements were $8.9 billion, down 36 percent from the prior year. Lower revenues for the year resulted from a 4 percent decrease in average selling price to $322,000, combined with a 34 percent decrease in the number of homes closed to 27,540.
Given the ongoing weakness in the home building industry, Pulte estimates a $0.15 to $0.30 per share loss in the first quarter of 2008.