Homebuilder NVR's profit sank 45 pct. in 4Q

RESTON, Va. (AP) — Homebuilder and mortgage company NVR Inc. said Thursday that its profit tumbled 45 percent in the fourth quarter as home closings and revenue from its mortgage segment declined.

The company said new home orders jumped 22 percent, but closings, or settlements, fell 9 percent from a year earlier.

NVR reported net income of $32.4 million, or $6.32 a share, for the three months ended Dec. 31. That compares with net income of $58.7 million, or $9.96 a share, in the prior-year quarter.

Total revenue declined 9 percent to $741.3 million from $811 million a year earlier, with revenue from homebuilding falling about 8 percent.

The results fell far short of analysts' consensus forecast, which called for earnings of $10.43 a share and $820.4 million in revenue, according to FactSet.

Shares fell $45.81, or 6.1 percent, to $701.03 in afternoon trading.

Sales of new homes picked up in the last three months of 2011, but the year still marked a new low point for new-home sales, based on figures dating back nearly half a century. The annual pace of sales of homes in December was less than half of the 700,000 that economists say would be sold in a healthy economy.

Uncertainty over the economy, high unemployment and concerns that home prices have yet to hit bottom are keeping many prospective homebuyers on the sidelines. Builders also are struggling to compete with cheap foreclosures.

NVR, which sells homes in 15 states, said new home orders totaled 2,158 units in the fourth quarter, while closings fell to 2,931.

The builder's backlog — a key indicator of future revenue — totaled 3,676 homes at the end of the quarter. That's up 26 percent from the end of 2010.

Income from NVR's mortgage lending business declined to $6.5 million from $7.8 million. Loan production fell 13 percent, the company said.

For 2011, NVR reported net income of $129.4 million, or $23.01 a share, compared with $206 million, or $33.42 a share, the year before.

Full-year revenue fell 13 percent to $2.66 billion from $3.04 billion.