MDC Holdings 3Q Loss Narrows, Company Sees 52% Higher Orders

M.D.C. Holdings Inc.'s (MDC) third-quarter loss narrowed on fewer write-downs and higher orders, joining several of its peers in posting improved results.

The company said it is encouraged by new-home orders, which surged 52% from a year ago to 1,016, rising for the second consecutive quarter, but its outlook "remains cautious because of the employment situation and the overall uncertain state of the economy."

MDC, which sells homes in 12 states, has joined KB Home (KBH) and Meritage Homes Corp. (MTH) in introducing smaller, more affordable homes. That move might be well timed, as the Federal Reserve noted earlier this month the pickup in real estate is concentrated in low- and middle-price homes.

There is some concern demand could soften if an $8,000 tax credit to lure first-time home buyers isn't extended beyond Nov. 30. The major housing industry trade groups have mounted a campaign for an extension.

M.D.C., which last recorded a profit in 2006, posted a loss of $32 million, or 69 cents a share, compared with a year-ago loss of $118 million, or $2.55 a share. The most-recent quarter included an impairment charge of $1.2 million and an $11.8 million increase in deferred tax valuation allowance. The 2008 quarter included a $95.4 million charge for asset impairments and an increase in tax alowance of $61.1 million.

Revenue slid 44% to $203.2 million.

Analysts surveyed by Thomson Reuters expected a loss of 37 cents on revenue of $228 million.

Cancellation rate fell to 23% from 46%. Home closings fell in all of the company's markets except Colorado.

Shares closed Thursday at $33.85 and were inactive in premarket trading. The stock is up 12% this year.

   -By John Kell and Nathan Becker, Dow Jones Newswires; 212-416-2480; [e-mail]