D.R. Horton expects $800M-$900M loss in 4Q

The nation's largest homebuilder projected the loss for the quarter ended Sept. 30 to range between $800 million and $900 million, including an expected tax benefit of $350 million. That works out to about $2.53 to $2.84 a share.

Analysts had been expecting a loss of 58 cents a share on revenue of about $1.6 billion when D.R. Horton reports its financial results on Nov. 25, according to a poll by Thomson Reuters.

"I expected things to be weak, given the other builders that reported recently, but I didn't expect things to be this weak," said Robert Stevenson, an analyst with Fox-Pitt Kelton.

He was particularly concerned by the spike in canceled home orders, which rose to 47 percent from 39 percent in the second quarter.

"I'm pretty sure that's the worst that we've seen," among the major builders, Stevenson said.

In the year-ago period, D.R. Horton lost $50.1 million, or 16 cents a share.

D.R. Horton projected revenue for the quarter would fall by half to $1.5 billion, reflecting steep declines in home sales and new orders.

"Market conditions in the homebuilding industry deteriorated during our fourth fiscal quarter and October, characterized by rising foreclosures, high inventory levels of both new and existing homes and reduced liquidity in the mortgage markets," Chairman Donald R. Horton said in a statement. "In addition, consumer confidence has been eroded by a weakening economy, higher unemployment and record volatility in the capital markets."

The Fort Worth, Texas-based builder expects to book $1.1 billion in pretax charges on inventory and land-related assets, and an additional pretax impairment charge of $80 million.