(RTTNews) - Homebuilder DR Horton Inc. (DHI: News ) on Friday reported a net loss for the fourth quarter that narrowed from last year, helped by fewer charges. Quarterly revenues dropped 42% year-over-year, reflecting lower home sales as market conditions in the homebuilding industry continued to be challenging. However, the company's net sales orders for the quarter increased 26% from last year.

The housing sector is one of the worst-affected by the subprime collapse and the credit crunch. With unemployment levels remaining high and loans becoming hard to come by, house purchases have become fewer. Added to this is the threat from discounted foreclosed homes.

However, declining home prices, historically low interest rates and government stimulus programs, such as the $8,000 federal tax credit and the $10,000 California state tax credit have created unique purchasing opportunities and made it more compelling for homebuyers to enter the market.

The federal tax credit of up to $8,000 for first-time homebuyers was scheduled to end on December 1, 2009. Homebuilders were pressuring lawmakers to extend the deadline, as it has supported home sales. The federal government has now extended the federal tax credit to run through July 1, 2010, and expanded the scheme to include people with higher incomes and some who want to trade up into new homes. As a result, DR Horton and other builders have seen new home orders improve this year.

Fourth-Quarter Results

The company's net loss for the fourth quarter narrowed to $231.9 million or $0.73 per share, from $799.9 million or $2.53 per share in the year-ago quarter.
The latest quarter's results included $192.6 million in pre-tax charges to cost of sales for inventory impairments and write-offs of deposits and pre-acquisition costs related to land option contracts that the company does not intend to pursue. The year-ago quarter's results include $1.1 billion in pre-tax charges to cost of sales for impairments of owned inventory and land and lots that were sold during the quarter and for write-offs of deposits and pre-acquisition costs related to land option contracts.

On average, sixteen analysts polled by Thomson Reuters expected the company to report a loss of $0.30 per share for the latest quarter. Analysts' estimates typically exclude special items.

For the preceding third quarter, the Fort Worth, Texas-based company's net loss was $142.3 million or $0.45 per share.

DR Horton's homebuilding revenue for the fourth quarter totaled $1.01 billion, down 42% from $1.75 billion in the same quarter of the prior year, and missed analysts' consensus revenue estimate of $1.11 billion for the quarter. However, the company's homebuilding revenue was higher than $791.4 million reported in the preceding third quarter.

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