DOW JONES NEWSWIRES
MDC Holdings Inc.'s (MDC) second-quarter loss narrowed less than analysts expected as the home builder's closings soared ahead of an expiring government tax credit.
During the quarter, the company "successfully executed a strategy designed to capture homebuyer demand in advance of the expiration of the federal homebuyer tax credit, resulting in an increase in our home orders year-over-year for the fifth consecutive quarter," said Chairman and Chief Executive Larry Mizel. The 4% increase contrasts with the slumps other home builders have reported for the spring.
Outside of orders, home builders have seen better results in recent quarters, helped by the federal government's tax credit given to first-time home buyers. Before a last-minute extension, closings had to have taken place by June 30 or the credit would be lost. MDC broke back into the black for the first time since 2006 in its fourth quarter and narrowed its loss in the first quarter.
MDC reported a second-quarter loss of $3.7 million, or 8 cents a share, from a year-earlier loss of $29.6 million, or 64 cents a share. Revenue jumped 67% to $326.3 million.
Analysts polled by Thomson Reuters had most recently forecast break-even results and $291 million in revenue.
Housing gross margin rose to 18.1% from 18%.
Closings were 1,135 homes, up sharply from 665 a year earlier, while the cancellation rate rose to 25% from 20%. The average selling price fell 1.7% to $274,300.
Shares closed at $29.16 on Thursday and were inactive premarket. The stock has fallen 15% in the past year.
Copyright © 2010 Dow Jones Newswires
