Centex Swings To 1Q Profit On $410 Million Tax Gain

Centex Corp. (CTX) swung to a fiscal first-quarter profit on a tax benefit while orders edged up from the prior quarter.

Centex and Pulte Homes Inc. (PHM) are set to become the largest U.S. home builder once Pulte's $1.4 billion acquisition of Centex is complete later this year. But the merger comes at one of the most challenging times for the housing sector, which is in its fourth year of decline. Housing data have shown some signs of improvement in recent months, but high unemployment and low consumer confidence weaken prospects for a full-blown recovery in the near term.

Centex, reported a profit of $85.1 million, or 68 cents a share, compared with a year-earlier loss of $150.1 million, or $1.21 a share, a year ago. The results for the quarter ended June 30 included a $410 million tax benefit, which helped offset $212 million in impairment and write-off charges. The prior-year quarter included $80 million in write-offs.

Revenue slumped 49% to $574 million.

Wall Street expected a loss of $1.17 a share on revenue of $563 million.

Centex reported orders of 2,871, compared with 4,215 a year ago and 2,843 in the first quarter. Closings fell 42% to 2,297 as the average sales price fell 10% to $237,085.

Centex's housing gross margin was flat at 11.8%, but improved 1.8 percentage points sequentially due to lower home site and brick and mortar costs.

Centex' stock recently fell 0.1% to $11.31.

Pulte is due to release its quarterly results later Monday.

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