Meritage nets $7 million in 1st 6 months

by Betty Beard The Arizona Republic Jul. 28, 2010 12:00 AM

Meritage Homes Corp., Arizona's sole publicly traded homebuilder, continued to see profits in the second quarter, bringing its net income for the first half of the year to $7 million, compared with a loss of $92 million a year earlier.

For the second quarter, the company reported net income of $4.2 million, or 13 cents a share, compared with a loss of $73.6 million, or $2.37 a share, in the same quarter of 2009. That was the second consecutive profitable quarter and follows three years of unprofitable quarters.

The net income was slightly ahead of the average 12-cent estimate from analysts polled by Thomson Financial Network.

The Scottsdale-based company said its net income was driven largely by an increase in home closings and better margins on homes built on recently acquired cheaper lots in good locations. Closings increased 36 percent in the quarter compared with a year earlier. Construction costs were also lower.

Net sales of new homes ordered fell to 900 from 1,147, a 22 percent drop.

Steven J. Hilton, chairman and chief executive, said in a statement that the sales dropped more than expected after the April 30 expiration of a federal credit.

He still expects sales to pick up later in the year. The company has been shifting building in communities where its margins are higher, such as deeply discounted lots it has been buying over the past 18 months in Arizona, California and Florida.

Share prices fell 23 cents, or 1.26 percent, to $17.97.



Meritage nets $7 million in 1st 6 months