Some companies like to take a ‘big bath’ by taking larger writeoffs sooner so they can show more profits later. That is, they don’t like to spread out the bad news.
KB Home announced Dec. 8 that it expects to take non-cash charges in its fiscal fourth quarter of between $235 million and $285 million to write down the value of its land holdings and an additional $90 million related to its abandonment of certain land-option contracts…
Dallas-based D.R. Horton Inc. took a pre-tax charge of $199 million to write down the value of land, options to purchase additional land, and pre-acquisition costs. Luxury homebuilder Toll Brothers Inc. took a pre-tax writedown of $115 million, a big jump from the $1.4 million charge the Horsham, Pa.-based company took in the same quarter last year.
Nevertheless, in another mystery of housing economics, the Standard & Poor’s 500 Homebuilding index has risen nearly 21% since late July after declining 33% during the first seven months of the year.