Citing “gradually improving” housing market conditions, Beazer Homes (BZH) narrowed its third-quarter loss on Friday as demand for new homes ramped up and houses sold at higher prices.
Beazer, which was hammered following the collapse of the housing market, said cost-cutting initiatives such as loan refinancing and the slow but steady improvement of economy have given a jolt its recovery.
The home builder reported a net loss of $39.8 million, or 40 cents a share, compared with a year-earlier loss of $59.1 million, or 80 cents. Excluding one-time items, Beazer lost 38 cents a share, versus average analyst estimates of a 33-cent loss in a Thomson Reuters poll.
Revenue for the three months ended June 30 was $254.5 million, up from $172.8 million a year ago, missing the Street’s view of $264 million. New orders climbed 28% year-over-year to 1,555 homes and average prices at closing climbed to $227,300 from $213,000 in 2011.
“I am very pleased with our third quarter results,” Beazer CEO Allan Merrill said in a statement. “We generated improvement in new home orders, home closings and backlog, recording our fourth consecutive quarter of year-over-year increases in these metrics.”
Beazer attributed the improvements to operational benefits and “gradually improving conditions in the housing market.”
Fueled by the increase in demand, home construction and land expenses leaped 33% during the quarter to $227 million compared with $152 million a year ago. But Beazer said it refinanced its 12% secured notes at a significantly lower cost, which it expects will save some $15 million a year.
“Taken together, we expect these actions to help accelerate our return to profitability,” Merrill said.
Shares of Beazer were up about 7% to $2.47.