Homebuilders Collapse
Fresh reminders of the struggling housing market sank shares of homebuilders and their suppliers Thursday. Home sales were weaker than expected in June and three of the biggest builders swung to huge losses during their latest quarters.
The Commerce Department reported Thursday that new home sales plunged to 834,000 last month from 893,000 the previous month. That undershot consensus expectations for 900,000.
Shares of Beazer Homes plummeted 11.1%, or $1.86, to $15.18, after the company turned a third-quarter loss of $123.0 million, or $3.20 per share, after a profit of $102.6 million, or $2.37 per share, a year go. Analysts polled by Thomson Financial expected a loss of 32 cents per share.
Shares of D.R. Horton fell 3.2% or 56 cents, to $16.92, after the company posted a third-quarter loss of $823.8 million, or $2.62 per share, compared with income of $292.8 million, or 93 cents per share, a year ago. Analysts polled by Thomson Financial expected a loss of 35 cents per share.
Pulte Homes announced a second-quarter loss of $508 million, or $2.01 per share, after a profit of $2.43, or 94 cents per share, a year ago. Analysts polled by Thomson Financial expected a loss of $2.04 per share. Despite the slightly better-than-expected result, shares of Pulte fell 3.9%, or 80 cents, to $19.87.
The homebuilders are feeling the sting of weak housing demand and abundant supply. That has forced them to slash prices to lure buyers and write down the value of the land and houses they own.