D.R. Horton records a first-quarter loss
D.R. Horton, one of the nation’s largest home builders, has recorded a loss of $1.31 billion in the first quarter, a dramatic swing from earnings of $51.7 million just one year earlier.
Revenue dropped 36.5 percent to $1.6 billion from $2.52 billion in the same period last year.
In the past six months, the company has been hit by $1.1 billion in inventory impairments and write-offs, in large part due to lower real estate values and canceled land option contracts.
The company’s backlog of homes as of March 31 was 8,947 units worth $2.1 billion, again a steep decline from the backlog of 16,885 homes, worth $4.8 billion, recorded at the same time last year. Net sales orders for the second quarter were 7,528 homes, down from 9,983 homes last year.
“Although market conditions in the home-building industry remain challenging, we continue to focus on reducing inventory and generating cash flow from operations,” said Donald Horton, chairman and CEO. “We reduced our homes in residential inventory … [and] we also maintained our focus on controlling our costs.”
Based in Fort Worth, Texas, D.R. Horton has operations in 27 states
Weyerhaeuser counts a loss in the first quarter
Weyerhaeuser, one of the world’s largest forest products companies, reported a net loss of $148 million for the first quarter of 2008, a large drop from the $720 million in earnings recorded in the same period last year.
Net sales for the first quarter were $3.4 billion, down 24.4 percent from $4.5 billion last year.
“Business conditions are extremely challenging,” said Daniel Fulton, president and CEO. “The number of single-family housing starts is now below the previous lows of 1979-82. Since many of our products are dependent upon single-family housing starts, we’ve experienced record low product prices when adjusted for inflation.”
The company has reduced its capacity for oriented strand board (OSB) and softwood lumber, Fulton said, and the company “will continue to take action as necessary to balance production to demand.”
The company is putting stock, however, in selling assets to maintain a “focus on our long-term strategic direction,” he added. One example has been the sale of Weyerhaeuser’s containerboard packaging and recycling assets to International Paper for $6 billion.
Declining prices and rising costs have hit the company, with prices for OSB and engineered wood products on the decline. Log costs, fuel costs and costs related to silviculture (replanting forests) have all risen, causing further strain, the company said.
Based in Federal Way, Wash., Weyerhaeuser had 2007 sales of $16.3 billion.
IKEA plans first Latin American location
According to a press release from the government of the Dominican Republic, IKEA has set its sights on that country for its first Latin American store, to be opened in early 2009.
The retailer plans to invest about $65 million on a store location near the country’s capitol of Santo Domingo, according to a report in Dominican Today.
The Dominican Republic has been one Latin American country targeted by international retailers in recent years because of its entry into trade agreements with the United States and the European Union.
Wal-Mart is one retailer that has reportedly had interest in the Dominican Republic — the world’s largest retailer has eyed a number of Central American locations. Rumors of the impending appearance of Home Depot, Sears, JC Penney and other retailers have persisted in media outlets and message boards catering to residents of the Dominican Republic. The IKEA announcement, however, has been the only entry officially confirmed by the country.