It's difficult to get beyond the notion that D.R. Horton
How do I reach that conclusion? Quite simply because, in losing just a hair short of $400 billion for the quarter, the company took $330.4 million in pre-tax charges for a host of inventory impairments, deposit write-offs, and land option costs. Yes, the quarterly results were more than half again better than the $824 million of red ink that Horton splashed about in the comparable quarter a year ago. But the losses are still relatively large and aren't falling at a rate that would indicate that the end of the company's travails is near.
Beyond that, the company's lineup of homes under contract at the end of the quarter was just over half the comparable figure a year ago. And the cancellation rate -- quite simply the rate at which the company gets stiffed when it writes sales contracts -- was 39%. Put another way, for every 10 homes sold by the company, about four aren't really sold at all.
But it's also clear that Horton, which produces more homes than any other builder, isn't alone in its misery. Such other big builders as Centex
The week will end with a report from Beazer
So the builders all continue to slog along, all directing their efforts at cash generation and the shoring up of their balance sheets, and all recognizing that the turning point could be a long way away. It's a point that Fools should be aware of as well.
Fool contributor David Lee Smith does own shares in Centex, but not in the other companies mentioned. He does welcome your questions or comments. The Fool has a beautifully designed and constructed disclosure policy.
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