High cancellation rates, an excess supply of new and existing homes and increased incentives from home builders pushed Denver-based MDC Holdings In. to a fourth-quarter loss.
MDC, which builds homes under the Richmond American name, posted a quarterly loss of $6.4 million, or 14 cents a share, compared with a profit of $197.5 million, or $4.29 a share, during the same period last year.
It posted a profit of $214.3 million for the year, down from $505.7 million in 2005. Revenue fell slightly, to $4.8 billion from $4.89 billion.
CEO Larry Mizel said 2006 “proved to be the most difficult year in the homebuilding industry in well over a decade.”
The company recorded a $56.5 million asset impairment charge and $4.1 million in project cost write-offs. Without the charge and write-offs, the company would have posted a profit of $54.3 million, or $1.18 a share in the fourth quarter.
The company also said it closed on fewer homes but selling prices were higher.
It closed 13,123 homes and produced home gross margins of 22.2 percent last year, compared with 15,307 closings and gross margins of 28.3 percent in 2005. The average selling price rose to $354,400 for the year, up $41,300 from the year earlier.
