Without the benefit of a federal tax incentive for homebuyers, Scottsdale-based Meritage Homes Corp. suffered a sizable drop in home sales in the second quarter compared with a year earlier but still managed to avoid a net loss.
Meritage Homes, the only publicly traded homebuilder headquartered in Arizona, reported Friday a net income of $562,000 for the quarter ending June 30, an 87 percent decrease from the second quarter of 2010, when it reported net income of $4.2 million, according to documents filed with the U.S. Securities and Exchange Commission.
Revenue from the closing of home sales was slightly more than $220 million, a 24 percent decrease from the same period a year earlier.
The number of home sales closed was 856 units, a decrease of 29 percent from the second quarter of 2010.
On the positive side, there were 910 new orders for homes in the second quarter, an increase of 1 percent from the same period a year earlier. New sales orders represent future revenue for the company.
Meritage Homes, like all homebuilders in Arizona, benefited last year from a federal income-tax rebate of up to $8,000 for new homebuyers that only applied to new-home orders signed before May 1, 2010.
The incentive helped Meritage Homes, which trades on the New York Stock Exchange, enjoy its first profitable year since before the housing crash began.
But there are no incentives in play this year to goose home sales. The company experienced a net loss of $6.7 million in the first quarter, which company officials said was because of, in large part, the elimination of the tax rebate.
Given the context, Meritage Homes Chairman and CEO Steven Hilton indicated in the company's second-quarter report that even a small profit is a considerable accomplishment in the current housing market.
"We were pleased to achieve a small profit in the second quarter despite lower closings and revenue this year compared to last year, with nearly identical margins," Hilton said.
He also expressed optimism about the company's near future.
"Our goal is to be profitable in 2011 for the second consecutive year coming out of this recession, and we believe that we are well positioned to accomplish that goal," Hilton said.
by J. Craig Anderson The Arizona Republic Jul. 30, 2011 12:00 AM
Scottsdale-based Meritage home sales, profits plunge
