Beazer Homes Posts Wider-Than-Expected Q2 Loss; Backs Positive Net Profit View

(RTTNews) - Beazer Homes USA Inc. (BZH) reported Thursday a narrower net loss in its second quarter on lower costs, despite a decline in revenues hurt by lower home orders and closings. Loss per share, meanwhile, was wider-than-expected by analysts, with revenues also below estimates.

Looking ahead for fiscal 2014, the homebuilder affirmed its expectation of positive net income and increased adjusted EBITDA guidance.

For the second quarter, net loss was $7.97 million or $0.31 a share, as against a loss of $19.64 million or $0.80 a share last year.

On a continuing operations basis, net loss narrowed to $8.22 million or $0.32 per share from last year's loss of $19.11 million or $0.78 per share.

On average, 10 analysts polled by Thomson Reuters expected loss per share of $0.20 for the quarter. Analysts' estimates typically exclude one-time items.

Total company adjusted earnings before interest, tax, depreciation and amortization or EBITDA was $18.5 million, higher than last year's $15.2 million. Gross profit increased to $52.17 million from $43.89 million last year, on lower costs.

Total revenue for the second quarter, meanwhile, declined to $270.02 million from prior year's $287.90 million, while 9 analysts estimated revenues of $292.87 million. Homebuilding revenue declined 6.8 percent to $266.1 million.

In the quarter, new home orders dropped 8.6 percent to 1,390 units from 1,521 units last year. Total home closings were 977 units, 13.3 percent lower than prior year's 1,127 units. Cancellation rates improved 70 basis points to 19.4 percent from 18.7 percent a year ago.

Beazer Homes in early April had noted that its second-quarter new orders and home closings, as expected, were impacted by an estimated 6 percent decline in active community count, as well as severe weather conditions.

Average sales price from closings increased 7.5 percent to $272.4 thousand from $253.3 thousand a year ago.

Total backlog from continuing operations was 2,163 homes with sales value of $637.1 million, compared to 2,211 homes with sales value of $584.2 million last year.

Allan Merrill, president and CEO, said, "Despite inclement weather and a slower start to the spring selling season than anticipated, we made further progress on our operational and financial objectives during the quarter... These results allow us to reaffirm our confidence in delivering full year profitability in Fiscal 2014 and in making substantial progress on our multi-year "2B-10" target this year."

For fiscal 2014, the company said it plans to update its expectations for several operational and financial metrics, including increasing the company's guidance for year-over-year growth in adjusted EBITDA, on its earnings conference call. Growth in adjusted EBITDA is now expected to be of at least $45 million, compared with fiscal 2013.

Beazer Homes shares closed Wednesday's trading at $18.96, up $0.22 or 1.17 percent.