As housing woes continue, homebuilders are suffering. Beazer Homes USA recently announced that thay are going to post $230 million pretax charges for its FY 2007 Q4 results. They will also suspend a quarterly dividend to save costs.
The charges include:
a. Costs related to land-option contracts abandonment
b. Inventory impairments (inventory values fall with home prices)
Other negative signals:
a. 53% drop from a year earlier in net new home orders- driven by high cancellation rate
b. Job cuts on 25% of its work force
c. 39% decline in home closings
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