NEW YORK -- Beazer Homes USA Inc. reported its first quarterly profit since 2006 on Tuesday and credited more stable home prices and cost cuts for a marked improvement in the homebuilder's gross margins.

The Atlanta-based company also posted an annual increase in new home orders, as low mortgage interest rates and a first-time homebuyer tax credit helped lure buyers. Beazer said it expects orders for the current fiscal year to modestly outpace those of fiscal 2009.

The company said foot traffic slowed somewhat in October as would-be buyers waited for word on whether the government would extend the tax credit. That news came last week as Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.

Beazer saw a jump in the number of shoppers over the weekend in some markets.

"We've got a six-month runway here of a tax credit, great affordability and great mortgage rates," said Ian McCarthy, Beazer's president and chief executive. "It's the industry's job and certainly our job to convince buyers that this is now a great time to buy a Beazer home."

The builder is even gearing up to buy more land - something rivals such as Ryland Group Inc., and Meritage Homes Corp., have been doing.

"Our belief that market conditions will modestly improve in 2010 does necessitate the need to begin securing additional land positions in certain markets," McCarthy said.

Investors applauded the builder's fiscal fourth-quarter results, propelling the stock as much as 15 percent higher at one point. Shares rose 41 cents, or 8.7 percent, to close at $5.10 Tuesday.

Beazer said net income for the period ended Sept. 30 totaled $33.8 million, or 84 cents per share. That compares with a loss of $473.9 million, or $12.29 per share, a year earlier. Excluding discontinued operations, earnings amounted to 87 cents per share.

The latest quarter includes pretax gains totaling $89.3 million on the early prepayment of debt.

The company's gross profit margin improved to 6.6 percent in the quarter, compared to negative 0.7 percent a year ago.

Revenue fell 42 percent to $376.3 million as completed sales tumbled 24 percent.

On average, analysts expected a loss of $1.24 per share on revenue of $338.3 million, according to a survey by Thomson Reuters.

New home orders rose 2.4 percent from a year earlier, with Indianapolis, Houston, Los Angeles and Nashville, Tenn., among its strongest markets.

---

AP Real Estate Writer J.W. Elphinstone in New York contributed to this report.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@