Wednesday, October 29, 2008

Centex Posts Smaller Loss, but huge recenue cut

Centex Corp. posted a smaller net loss for its fiscal second quarter Tuesday, but the housing slump cut the struggling home builder’s revenue by more than half.

Dallas, Texas-based Centex (NYSE: CTX) said that it lost $172 million, or $1.38 per share, for the quarter that ended Sept. 30. That compares to a loss of $644 million, or $5.26 a share, in the year-ago quarter.

Factoring out an after-tax gain of $30 million for the sale of its Westwood Insurance Agency, Centex recorded a third quarter net loss from continuing operations of $202 million, or $1.62 per diluted share – an improvement from the year-ago comparable loss of $645 million, or $5.27 per diluted share.

The narrowing of the net loss resulted from an $873 million reduction in paper losses taken for impairments on land and joint ventures.

The bottom-line improvement was not indicative of Centex’s top-line performace. The company’s revenue plummeted 54 percent, to $1.01 billion, matching the 54 percent drop in sales orders, which fell to 2,728. Factoring out results from Centex’s Financial Services business, the company posted a 55 percent drop in home-building revenue – to $953 million – as closings plunged 48 percent.

Centex has long been one of the most active home builders in the Triangle. The company ranked No. 1 on Triangle Business Journal’s list of residential homebuilders for years before falling into second place with 928 homes completed in 2007. This year has been hard on Centex’s national and local operations, as evidenced by longtime Raleigh division President Hampton Pitts resigning in July after 16 years with the company.

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