There are several things that have to occur before the homebuilders will be able to move forward toward generating earnings again. Obviously, one of the more important hurdles that must be crossed will involve a reduction in impairment charges.
A salient aspect of the company's results was a set of impairment charges that dropped to $54.8 million, from $141.4 million in the March-ending quarter of 2007. So MDC might be en route to scaling that hurdle of cutting its one-time charges to a manageable basis.
The company generated orders in the quarter, net of cancellations, for 1,098 homes valued at about $324.0 million. But as a key indication that the industry is still in a quagmire, MDC's order cancellation rate increased to 43%, versus 35% for the same period a year ago.
With most of the big builders today in survival and balance sheet-strengthening mode, it's important to point out that MDC now has about $1.2 billion in cash on its balance sheet, along with no borrowings outstanding on its $1.25 billion line of credit.
MDC's release of its quarterly results comes immediately behind similar releases by Pulte
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Fool contributor David Lee Smith does own shares of Centex, but he doesn't have a position in the other companies mentioned. He does welcome your questions or comments. The Fool has a disclosure policy.