By Brian Louis
(Bloomberg) — Pulte Homes Inc., the largest U.S. homebuilder, reported its 13th straight quarterly loss as a drop in market value after its purchase of rival Centex Corp. spurred a $563 million impairment charge.
The net loss in the fourth quarter narrowed to $116.9 million, or 31 cents a share, from $338.2 million, or $1.33, a year earlier, the Bloomfield Hills, Michigan-based company said today in a statement. The average estimate of eight analysts in a Bloomberg survey was for a loss of 24 cents a share.
The fourth-quarter results had $925 million in charges, including the impairment of so-called goodwill tied to the Centex purchase last year. The costs more than offset an $800 million gain from a change in U.S. law allowing companies to reclaim some of the taxes paid during the five-year housing boom. The benefit helped builders including D.R. Horton Inc. and Lennar Corp. report profits for the most recent quarter.
"We are much closer to being profitable than many expected," Richard Dugas, Pulte's chief executive officer, said in a conference call with analysts. "While we are cautiously optimistic about housing demand in the year ahead, we can't control macro conditions but can only be prepared to respond as the year plays out."
Pulte fell 2.3 percent to $10.87 at 12:01 p.m. in New York Stock Exchange composite trading. The stock declined 2 percent in the 12 months through yesterday, compared with a 24 percent gain in the Standard & Poor's Supercomposite Homebuilding Index.
The goodwill writedown was prompted by a more than $1 billion decline in Pulte's market value in the two months after the Centex purchase, Chief Financial Officer Roger Cregg said on the call. The shares sank 27 percent from the date the deal was approved by shareholders Aug. 18 through October.
Excluding one-time items, the company said it operated "at approximately breakeven."
Sales of new U.S. homes unexpectedly fell in December to an annual pace of 342,000, the Commerce Department reported Jan. 27. For all of 2009, sales dropped 23 percent to 374,000, the fewest since Commerce Department recordkeeping began in 1963. Pulte closed sales on 15,013 homes in the fourth quarter, a 29 percent decline from the same period in 2008.
Revenue rose 5.3 percent to $1.73 billion. The average sales price fell 7.2 percent to $258,000 in the quarter. The number of homes sold increased 13 percent to 6,200 and the number of houses ordered more than doubled to 3,748 as the Centex business was added to Pulte's.
The $3.3 billion purchase of Centex made Pulte the nation's largest home construction company and boosted its sales to entry-level buyers. Before the acquisition, half of Pulte's sales were from developments designed for people 55 and older, a group less likely to take advantage of a government tax credit enacted last year that granted $8,000 to first-time homebuyers.
Pulte said in November that the purchase would save the company $440 million a year. The companies agreed to the deal in April after Centex lost 70 percent of its market value in the previous 12 months and Pulte lost 30 percent.
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