Wednesday, April 27, 2005

Centex Sells Land, Mortgage Business Down

The home builder Centex is out with the past quarter and fiscal year results. It is a lot to take in, but here's something unusual. "The housing gross margin improvement was driven primarily by an increase in the average selling price of homes delivered..Additionally, land sales contributed 40 basis points of the 200 basis point gross margin improvement."

So Centex is selling land and that made up 25% of the increase in GM. Let's poke around the mortgage division. "Operating earnings from CTX Mortgage Company totaled $21 million for the fourth quarter of fiscal 2005, 21% lower than $27 million for fiscal 2004's fourth quarter. Originations from Centex Homes' closings increased 4% while retail originations fell 18%. Fiscal 2005 operating earnings from CTX Mortgage Company were $96 million compared to $166 million for the same period a year ago."

That fall could be attributed to a widening credit spread for the firm. "CTX Mortgage provided mortgage loans to 73% of Centex Homes' buyers for the fourth quarter."

8 Comments:

At 2:42 PM, Blogger John Law said...

maybe they are selling land to keep earnings up?

 
At 3:30 PM, Anonymous Anonymous said...

John,
It's a big surprise. It could be some land they don't want, etc. But they didn't raise guidance and the after hours number is down. Reuters says Pulte is up after hours, but I see them down. Hmm.
Ben

 
At 3:50 PM, Blogger Alice said...

Centex corporate management has been dumping stock ever since 2001, which is why I thought the bubble would burst years ago.

Centex Insider Trades

 
At 7:28 PM, Blogger mspenelope said...

4/27/05

My friend, who lives in La Quinta CA., sent this article today....

http://www.thedesertsun.com/apps/pbcs.dll/article?Date=20050427&Category=BUSINESS04&ArtNo=504270327&SectionCat=newsletter&Template=printart

The title is.....

"Want to be Merv Griffin's neighbor?
For $900,000, you can buy a house on land parceled from TV legend's ranch"

These people don't leave you a whole lot of room to flip before the pop!

 
At 8:23 PM, Blogger Travis said...

Can lending "tighten" while rates stay low?

 
At 10:06 PM, Anonymous Don said...

Yes, lenders can increase their downpayment requirements or increase the credit score required to get a particular interest rate.

 
At 10:51 PM, Anonymous Anonymous said...

Ben,

Here is a desperate auction we will be seeing a lot more of, unfortunately.

Cashking

 
At 5:33 AM, Anonymous Anonymous said...

http://www.roubiniglobal.com/setser/archives/2005/04/a_glass_half_em.html

http://angrybear.blogspot.com/2005/04/housing-after-boom.html

and

http://angrybear.blogspot.com/2005/04/after-housing-boom-impact-on-economy.html

 

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