Beazer Homes Q4 Profit Surges, Results Beat View

(RTTNews) - Homebuilder Beazer Homes USA Inc. (BZH) on Wednesday reported a profit for the fourth quarter that rose five-fold from last year, reflecting higher home closings and selling prices in addition to a tax benefit.

Results for the quarter beat analysts' estimates. The company also reported a profit for fiscal 2014, marking its first full year of profitability since 2006.

For the fourth quarter, the Atlanta, Georgia-based company's net income was $59.85 million or $1.88 per share, up from $11.95 million or $0.38 per share in the year-ago period.

The latest quarter's results include $4.9 million in unexpected warranty charges, related to water intrusion issues in homes built, on average, more than 7 years ago located in Florida and New Jersey. The latest quarter as well as fiscal 2014 results also include a non-cash tax benefit of $13.9 million.

Income from continuing operations for the quarter surged to $60.29 million or $1.90 per share from $11.33 million or $0.36 per share in the same period last year.

On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenue for the quarter grew 25 percent to $545.91 million from $438.33 million in the year-ago period. Analysts were looking for revenue of $506.35 million.

Homebuilding revenue increased 15 percent to $500.63 million from $436.19 million in the same period last year.

Total home closings in the quarter rose 2.3 percent to 1,695 units from 1,657 units in the year-ago period. Average sales price from closings increased 12.2 percent to $295.4 thousand from $263.2 thousand a year ago.

In the quarter, new home orders declined 1.6 percent to 1,173 units from 1,192 units last year. Cancellation rates declined 50 basis points to 23.4 percent from 23.9 percent a year ago.

Total backlog from continuing operations at the end of the quarter was 1,690 homes with sales value of $515.9 million, down from 1,893 homes with sales value of $528.1 million last year.

For fiscal 2014, Beazer Homes' net income was $34.38 million or $1.08 per share, compared to net loss of $33.87 million or $1.37 per share in the prior year. Total revenue for the year rose 13 percent to $1.46 billion from $1.29 billion last year.

Street expected the company to report earnings of $0.48 per share for the year on revenues of $1.43 billion.

Allan Merrill, CEO of Beazer Homes said, "We are very pleased to report positive net income for fiscal year 2014. Returning to profitability represents a key milestone for our employees and shareholders - particularly because it was achieved from fewer new home communities, lower home closings and in a challenging home sales environment."

Looking ahead to fiscal 2015 and beyond, Merrill added, "Our higher community count should lead to growth in new home orders, closings and average selling prices, allowing us to make further improvements in Adjusted EBITDA in 2015 and positioning us to reach our 2B-10 objectives by the end of 2016."

One year ago, Beazer Homes introduced a multi-year target to achieve $2 billion in revenue and a 10 percent adjusted EBITDA margin leading to $200 million in adjusted EBITDA, which it called the "2B-10 Plan."

BZH closed Tuesday's trading at $19.25, up $0.26 or 1.37 percent on a volume of 1.17 million shares.