November 29, 2011
COLUMBUS — M/I Homes Inc. on Thursday reported a wider loss for the second quarter, as the homebuilder booked charges to write down the value of assets and delivered fewer homes.
The company’s completed home sales fell 25 percent from a year earlier. But new home contracts rose 5 percent.
CEO and President Robert Schottenstein said housing conditions remained challenging during the quarter, despite the pickup in orders.
“While our new contracts improved over last year’s second quarter, the spring selling season was not nearly as robust as many had expected,” he said.
Homebuilders reported sharp annual declines in home orders earlier this year as the spring season got going, despite seeing seasonal increases in traffic by prospective buyers.
Overall U.S. sales of new homes fell 1 percent in June to a seasonally adjusted annual rate of 312,000 homes, well below the 700,000 a month economists consider healthy.
High unemployment, larger down payment requirements and tougher lending standards are preventing many people from buying homes. And some potential buyers who can clear those hurdles are holding off, worried that home prices have yet to bottom out.
M/I Homes said it lost $9.1 million, or 49 cents a share, for the three months ended June 30. That compares with a loss of $4.8 million, or 26 cents a share, a year earlier.
The most recent period included $9 million of asset write-downs and pretax losses from operations. The prior-year quarter included $8.2 million in charges.
Total revenue for the latest quarter fell to $137.4 million, from $196.4 million in the prior-year quarter.
New contracts increased to 635 from 602 a year earlier. Delivered homes fell to 590 from 790 the year before. The average home closing price slipped to $227,000 from $245,000.
The builder’s cancellation rate edged up to 20 percent from 16 percent a year ago.
M/I Homes is based in Columbus, Ohio, and builds homes in eight states.
Shares fell 43 cents, or 3.7 percent, to $11.20 in afternoon trading.