Beazer Homes USA Inc., an Atlanta-based builder, rose the most in almost 15 months after reporting a narrower quarterly loss and saying it expects to become profitable in the second half of the fiscal year.
Beazer had a loss from continuing operations of $19.1 million, or 78 cents a share, for the second quarter ended March 31, compared with a loss of $37.9 million, or $2.41, a year earlier, the company said in a statement today. It should have a profit in the fiscal fourth quarter, Chief Executive Officer Allan Merrill said.
“Management’s profitability forecast is an unexpected positive catalyst,” Jay McCanless, an analyst with Sterne Agee & Leach Inc., wrote in a note today. McCanless, who rates Beazer buy, raised his price target by $1 to $22 after the report.
Beazer rose 10 percent to $18.52, the biggest advance since Feb. 3, 2012. The stock has gained 9.7 percent this year.
Demand for new homes has been growing as buyers seeking to take advantage of low mortgage rates find a tight supply of existing homes for sale. New homes sold at an annual pace of 417,000 in March, capping the strongest first quarter since 2008, the Commerce Department reported April 23.
“With a substantially higher backlog, improving margins and tight control of fixed costs, we expect to report positive net income for our fiscal fourth quarter, which should allow us to be profitable for the second half of fiscal 2013,” Merrill said in the statement.
The 11-member Standard & Poor’s Supercomposite Homebuilding Index, which doesn’t include Beazer, rose 3.5 percent today and has gained 18 percent this year.