M.D.C. Holdings Inc.'s (MDC) third-quarter loss narrowed on
fewer write-downs and higher orders, joining several of its peers
in posting improved results.
The company said it is encouraged by new-home orders, which
surged 52% from a year ago to 1,016, rising for the second
consecutive quarter, but its outlook "remains cautious because of
the employment situation and the overall uncertain state of the
economy."
MDC, which sells homes in 12 states, has joined KB Home (KBH)
and Meritage Homes Corp. (MTH) in introducing smaller, more
affordable homes. That move might be well timed, as the Federal
Reserve noted earlier this month the pickup in real estate is
concentrated in low- and middle-price homes.
There is some concern demand could soften if an $8,000 tax
credit to lure first-time home buyers isn't extended beyond Nov.
30. The major housing industry trade groups have mounted a campaign
for an extension.
M.D.C., which last recorded a profit in 2006, posted a loss of
$32 million, or 69 cents a share, compared with a year-ago loss of
$118 million, or $2.55 a share. The most-recent quarter included an
impairment charge of $1.2 million and an $11.8 million increase in
deferred tax valuation allowance. The 2008 quarter included a $95.4
million charge for asset impairments and an increase in tax
alowance of $61.1 million.
Revenue slid 44% to $203.2 million.
Analysts surveyed by Thomson Reuters expected a loss of 37 cents
on revenue of $228 million.
Cancellation rate fell to 23% from 46%. Home closings fell in
all of the company's markets except Colorado.
Shares closed Thursday at $33.85 and were inactive in premarket
trading. The stock is up 12% this year.
-By John Kell and Nathan Becker, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com