From the William Lyon Q4 statement released today:
During the last half of the fourth quarter of 2005, the Company began to experience some slowing in new orders in many of its markets, increases in cancellation rates and increasing pricing pressures from several of its competitors who initiated aggressive incentive and discounting programs.
This softening in the Company's markets is continuing into 2006 as the Company's orders have declined for the first eight weeks of 2006 by 31% over the comparable period in 2005. Cancellation rates have increased in this period in 2006 to 26% from 12% in the comparable period in 2005. The Company is also seeing increases in its standing and unsold completed inventory in 2006 as compared to 2005.
Based upon these changing market conditions, the Company is now targeting approximately 3,100 deliveries, including consolidated joint ventures, for the full year 2006, which will result in homebuilding revenue of approximately $1.65 billion. The Company has lowered its expectations for additional price appreciation in certain markets as well as factored in some additional incentives to move certain products, all of which have a negative impact on consolidated homebuilding gross margin percentage.
March 02, 2006
Unfortunately, publicly traded builders have to tell it like it is (even Bob Toll one day soon)
Subscribe to:
Post Comments (Atom)
3 comments:
Some builders have very little cash.
CTX, KBH, and BZH all had large negative cash flows while the market was good.
They also have large debt loads. We'll certainly be seeing some BK's from this.
even Bob Toll?
He is the mesenger of death
Bob Toll has been telling us for over a year what he really thinks:
http://www.insidercow.com/history/company.jsp?company=TOL
Where he's sold tens of millions of his stock.
Post a Comment