Pulte Q4 loss widens
Bloomfield Hills, Mich.-based home builder PulteGroup reported a fourth-quarter net loss of $165 million, compared with a net loss of $117 million in the prior-year quarter. The loss for the quarter ended Dec. 31, 2010, includes $196 million in land-related charges and costs associated with organizational restructuring, debt pay-down and other financing amendments.
Consolidated revenue for the fourth quarter totaled $1.2 billion, down 29% from prior-year revenue of $1.7 billion.
"After four years of steep declines, the U.S. housing market continues to show signs of stabilizing, albeit at historically low levels," said Richard J. Dugas Jr., chairman, president and CEO of PulteGroup. "Businesses are once again adding jobs, which directly stimulates buying and, in turn, consumer confidence, both of which are critical to ultimately raising demand for new homes. In fact, we may already be realizing some positive effects as January buyer traffic and sales trends were encouraging, although we’ll have to see if this continues through the selling season and the year."
Fourth-quarter 2010 net new orders were 3,044 homes, down 19% from orders of 3,748 homes in the same period of 2009. PulteGroup ended the quarter with a contract backlog of 3,984 homes, with a constructed value of $1.1 billion. Backlog for the fourth quarter of 2009 was 5,931 homes, valued at $1.6 billion.
For the full year ended Dec. 31, PulteGroup reported a net loss of $1.1 billion, compared with a prior-year net loss of $1.2 billion.
Revenue from home sales for the year totaled $4.4 billion, up 13% from revenue of $3.9 billion in 2009. This increase reflects full-year closings of 17,095, up 14% from the prior year, and a less than 1% increase in average selling price to $259,000. The inclusion of Centex’s operations for the full year of 2010 drove the higher volume, compared with only four-and-a-half months in 2009.
Decking demand projected to grow
The demand for decking products in the United States is expected to grow by 2.7% over the next four years, with the majority of this $6.2 billion forecasted demand falling in the composites category, according to a study just released by the Freedonia Group, a Cleveland-based industry market research firm.
Wood-plastic composite and plastic lumber decking materials are expected to experience double-digit demand gains through 2014. Composite decking will account for nearly 70% of demand growth in lineal foot terms, according to the report. In addition to its low maintenance requirements, composite decking’s resemblance to wood decking, consumer perception of it as being an environmentally friendly option, and the introduction of hidden fastener systems that facilitate installation will boost demand gains.
Wood decking will continue to account for the majority of decking demand in volume and value terms, although demand for wood decking is forecast to rise only one-half of 1% annually through 2014. While gains will be restrained by competition from composite and plastic decking materials, interest in tropical hardwoods, such as ipe, will provide growth opportunities in the residential building and non-building construction markets.
The residential market accounted for 59% of decking demand in 2009, a lower share than the historical average and indicative of the low level of housing activity that year. Through 2014, decking demand in the residential market is forecast to advance at the most rapid pace of all markets. Rebounding housing completions and improvement and repair expenditures will spur gains. Growth will also be supported by homeowner desire for larger decks. Decking demand in the nonresidential market is projected to rise 2.4% annually through 2014, as rebounding office and commercial construction expenditures drive growth.
Standard Pacific reports $21.9 million Q4 loss
Standard Pacific, a production home builder with operations in eight states, reported a net loss of $21.9 million for the fourth quarter of 2010, compared with net income of $82.7 million for the same quarter a year ago. The 2010 fourth quarter included a $23.8 million charge related to the early extinguishment of debt and $2.3 million of asset impairments. Excluding these one-time charges, the company generated net income of $4.3 million for the 2010 fourth quarter.
For the full year, Standard Pacific reported net income of $11.7 million compared with $13.8 million in fiscal 2009. Excluding debt restructuring charges and other impairments, net income for fiscal 2010 was $20.6 million.
Home-building revenues for the 2010 fourth quarter were $212.4 million, down 37% from $339.8 million for the 2009 fourth quarter. The decrease in revenues was driven primarily by a 34% decline in new home deliveries, which dropped to 619 homes from 943 home a year ago.
Home-building revenues for 2010 were $912.4 million, compared with $1.17 billion for the prior year.
Net new orders were also down 22% in the quarter to 428 homes. The average home price rose 7%, from $318,000 to $340,000. The company said this increase was largely due to the delivery of more higher-priced homes in California and a reduction in deliveries in Florida and Arizona, as compared with the 2009 fourth quarter.
In a prepared statement, Standard Pacific’s president and CEO, Ken Campbell, said the home builder has “a substantial amount of capital and liquidity to continue our land acquisition strategy” as a result of its debt refinancing. “As a result of our land buying efforts, we expect to open over 55 new communities in 2011, 35 of which are slated for the first half of the year,” Campbell said.