MDC Holdings Inc. swung to a fourth-quarter loss much wider than analysts had forecast, and the struggling homebuilder’s closings and orders dropped sharply, after a year-earlier quarter that was boosted by a $142.6 million tax benefit.
Chairman and Chief Executive Larry Mizel said the company was “committed to expediting our company’s return to profitability,” and he noted MDC cut more than 100 positions in the fourth quarter, “which should result in significant savings.” MDC has posted only one quarterly profit — the one in the year-ago quarter — since 2006.
Results for homebuilders had been helped in recent quarters — and MDC had narrowed its losses of late — because of consumers rushing to buy homes before the federal government’s first-time homebuyer tax credit expired last spring. But since the credit’s expiration, orders and closings have plunged.
MDC reported a loss of $30 million, or 65 cents a share, from a profit of $127.2 million, or $2.68 a share, in the year-earlier quarter, which included the hefty tax benefit.
Revenue dropped 20 percent to $259.6 million.
Analysts polled by Thomson Reuters had most recently forecast a loss of 18 cents on $269 million in revenue.
Home gross margin fell to 17 percent from 18.8 percent.
Orders dropped 19 percent to 519 homes, and closings totaled 865, down 22 percent from a year earlier. The cancellation rate rose to 46 percent from 30 percent, and the average selling price rose 8.7 percent to $291,700.
Shares closed at $31.29 and were inactive premarket. As of Thursday’s close, the stock had fallen 12 percent the past year.
