Saturday, February 5, 2011

Meritage Homes posts $7.2 million profit

Under normal circumstances, a homebuilder the size of Scottsdale-based Meritage Homes Corp. would not regard annual net earnings of $7.2 million as anything to brag about.

But after suffering hundreds of millions in losses over three of the worst years in housing-market history, Meritage Homes Chairman and CEO Steven J. Hilton indicated that returning the company to profitability was an ambitious goal, indeed.

"We achieved our Number 1 goal for 2010, which was to be profitable for the year," Hilton said in an earnings statement issued Wednesday.

The company, which trades on the New York Stock Exchange, sold fewer homes in 2010 than it had sold during the previous year but still managed to improve its bottom line from a net loss of $66.5 million in 2009.

"Despite lower closing revenue in 2010, we returned to profitability primarily by improving our margins and holding down our overhead expenses," Hilton said.

According to the company's 8-K quarterly report to the U.S. Securities and Exchange Commission, covering the quarter that ended Dec. 31, Meritage Homes sold a total of 3,700 homes in 2010, compared with 4,039 homes sold during the previous year, a decrease of 8 percent.

However, the company managed to squeeze about 10 times as much profit out of the sale of each home in 2010.

"We've dramatically reduced our lot and construction costs over the last few years, carefully controlled our overhead costs . . . redesigned our homes to be more efficient and appealing, and emerged as the leader in profitable, energy-efficient home building," Hilton said.

by J. Craig Anderson The Arizona Republic Feb. 3, 2011 12:00 AM

Meritage Homes posts $7.2 million profit

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