AP
Beazer Homes Shares Drop Sharply
Wednesday August 1, 12:22 pm ET
ATLANTA (AP) -- Shares of Beazer Homes USA Inc. fell sharply Wednesday amid worries about the ability of builders to pay their bills as subprime lending woes expand to other parts of the market and push housing prices down.
The Atlanta-based company's shares were down $2.59, or 18.5 percent, at $11.40 in midday trading, after having fallen as much as 40 percent earlier in the day.
The stocks of other homebuilders also were down, but not as much. A spokeswoman for Beazer Homes did not immediately respond to messages left at her office, on her cell phone and by e-mail.
Beazer Homes issued a statement saying rumors it is preparing a bankruptcy filing are unfounded.
Last week, Beazer Homes, which faces federal investigations of company practices and personnel, said it swung to a loss in its fiscal third quarter after the homebuilder cut prices to spur sales and took major charges to write down the value of unsold inventory.
For the three months ended June 30, the company posted a loss of $123.01 million, or $3.20 per share, compared to a year ago when it earned $102.62 million, or $2.37 per share.
The latest quarter included pretax charges of $188.5 million to write down the value of inventory and goodwill as well as to forfeit options on land.
As for the probes involving the company, Beazer Homes previously disclosed that it received a subpoena from the United States Attorney's office in the Western District of North Carolina, seeking the production of documents focusing on the company's mortgage origination services. The Securities and Exchange Commission has launched a formal investigation of Beazer Homes to determine whether any person or entity related to the company violated federal securities laws.
The company said it is cooperating with the inquiries.
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