"Taking into account the option deposit and walk-away costs, land valuation adjustments and the tax provision adjustment, the company expects to report a loss from continuing operations of approximately $2.00 per fully diluted share for the third quarter. Before these adjustments, the company expects its third quarter earnings to be approximately $0.75 per share."
- 8,360 homes closed, down 12% Year-Over-Year
- 6,139 (net) orders, down 24% Year-Over-Year
- Declined/Cancelled options on 37,000 lots at a cost of $150 million
- Valuation writedown of $300 million on lots it controls
- Increasing its provision for taxes by $60 million due to federal audit
I am a firm believer of watching the public homebuilders actions for a general view of the housing market. Homebuilders are walking away from options just like home buyers are, homebuilders aren't buying land just like home buyers aren't buying homes. Whether you think homebuilders are lagging or leading indicators, either way it is a show that the downward trend is continuing. There is a thought among analysts that the homebuilders are loading up the end of the calendar year quarter with as much writedowns as legally possible in order to present a favorable view (their ferverent hope) next year at the same time for the stock. The next few weeks are ripe with data reports from homebuilders and real estate related companies, I will keep everyone updated.
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