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Tuesday, July 29, 2008

Centex: Losses Increase, CEO Sees No Improvement this Year

by Calculated Risk on 7/29/2008 05:19:00 PM

"The housing market worsened in the June quarter, and I don't expect to see it improve this fiscal year,"
Tim Eller, chairman and CEO of Centex Corp.
Note that Centex's fiscal year starts in April, so the CEO is seeing no improvement through March 2009.

From Centex: (hat tip Ken) Centex Reports First Quarter Results
Fiscal 2009's first quarter revenues were $1.13 billion, 41% lower than the same quarter last year. The loss from continuing operations for the first quarter was $169 million ... up from a loss of $132 million ... in the previous year's fiscal first quarter. Included in the first quarter of fiscal 2009's loss from continuing operations are $80 million of impairments and other land-related charges, including the Company's share of joint venture impairments.
The land impairments continue.

From the Centex Investor Materials (from 8-K filed with SEC):
  • Market conditions worsened in the quarter

  • Foreclosures are rising

  • Employment is weakening

  • Consumer confidence is waning

  • Mortgage qualification standards are tightening

  • Traffic and sales have diminished
  • Not exactly the most positive investor material I've seen!

    Also, Centex is one of the companies I use to track changes in cancellation rates. They didn't report cancellations in the 8-K, so we will have to wait for the 10-Q. Cancellations had been trending down for Centex, but with these very negative comments, we might see another increase in cancellation rates.