The chairman of Fort Worth, Texas-based homebuilder D.R. Horton said foreclosures and tighter mortgage lending standards are among the items hurting his company’s performance.
In its first fiscal quarter of 2011, ended on Dec. 31, 2010, Horton lost $20.4 million, which included a pretax charge of $8.4 million for inventory impairments and land option cost write-offs.
Net income for the same quarter of fiscal 2010 was $192 million, which included a tax benefit of $149.2 million. Homes closed totaled 3,637, compared to 5,529 homes in the same quarter of fiscal 2010.
Principal Donald R. Horton said “Housing affordability remains near record highs, interest rates are favorable and new home inventory is still very low. However, we still face challenges, such as rising foreclosures, significant existing home inventory, high unemployment, tight mortgage lending standards and weak consumer confidence.
“While our year-over-year comparisons for net sales orders are very difficult for the next two quarters, we do expect to see an increase from the sales levels we achieved in the December quarter.”
The Ryland Group Inc., Calabasas, Calif., lost $19 million for the fourth quarter of 2010, compared to net earnings of $39 million for the same period in 2009.
Its quarterly results include a pretax charge of $15.4 million for inventory and other valuation adjustments, write-offs and loan loss reserves.
In its fourth quarter, NVR Inc., Reston, Va., had net income of $59 million. However, this was down by 3% when compared with the same period in 2009.
For the year NVR had net income of $206 million, up from $192 million in 2009.
Its mortgage banking unit had income before tax of $7.8 million, down from $8.7 million for the fourth quarter in 2009. The current quarter’s income was hurt by a loan loss provision of $4.2 million.
Otherwise, the company’s closed loan production of $598 million for the fourth quarter was 10% higher than the same period in 2009. For the full year, production was $2.2 billion.
Income before tax for 2010 decreased 7% to $33 million from the $35 million reported for 2009. The full year 2010 pre-tax income results were negatively impacted by a $6.2 million provision for loan losses.
