When Horton’s CEO reported earnings for the company’s fourth fiscal quarter in mid-November, he said, “To be quite candid, I don’t see much on the horizon that would give anybody a great degree of comfort on the financial condition of the country. I just don’t see a lot of hope for a great spring market.” Does that sound encouraging?
Or does any of this sound encouraging? PulteGroup, Inc. (NYSE: PHM) reported an EPS loss of -$2.63 for its most recent quarter, posting $1 billion in impairment and other charges. Lennar Corp. (NYSE: LEN) reported an EPS gain of $0.06 for its third quarter, but that is expected to fall to just $0.02 in the fourth quarter and to a loss in the first quarter of 2011. KB Home (NYSE: KBH) reported a loss in its third quarter and expects more in the fourth quarter. (NYSE: TOL) posted a loss in its third quarter and only showed a profit in the fourth quarter due to an unexpected tax benefit.
Now there was something approximating good news about October 2010 pending home sales. The National Association of Realtors reported a 10.4% increase in its pending home sales index from September to October. September’s report noted a -1.5% decline from August. But compared with October 2009, this past October was down more than 20%. Those figures are for seasonally adjusted annual rates; the non-adjusted numbers are about 10% worse.
If there is any substantively good news for homebuilders, it’s pretty well hidden. Homebuilders’ shares are all down between -1% and -3% in early trading this morning, and the SPDR S&P Homebuilders ETF (NYSE: XHB) is down a little more than 1%.
Paul Ausick
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