The hits just keep on coming in housing
* Beazer Homes reported earnings of 41 cents per share, ex-items, 10 cents below the Reuters Estimates consensus. Sales dropped 27% year-over-year. Its forecast for fiscal 2007, per-share earnings: $1.25 to $1.50 vs. a consensus forecast of $2.32. Orders (net of cancellations) plunged 54% to 1,779 in the first quarter from 3,872 a year earlier. As I've been pointing out, Florida continues to be one of the hardest-hit regions in this downturn. Florida orders collapsed 86% YOY.
* WCI Communities warned that Q4 earnings would fall below prior forecasts on weak demand, defaults of previously contracted condo units, and write-offs. Gross orders of 261 were wiped out by 270 cancellations, resulting in -9 net orders.
* Ryland Group reported a 46% drop in fourth-quarter profit and $54 million in costs to write down property and write off land options. The $1.98 per share in earnings missed forecasts for $2.07. Ryland announced a full-year target of $3.75 to $4.25 in per-share profit, missing the Bloomberg estimate of $4.72. New orders dropped 44%.
Other builders, including Centex and D.R. Horton reported more of the same -- weak orders ... lots of cancellations ... higher incentives ... falling profit. But the home building stocks have been strong lately on the assumption the worst is over. This spring selling season is therefore key -- will the optimists be rewarded with a strong season, or are pessimists like myself on the right track? We'll see...