Beazer and other builders report huge profits after government gifts them a big tax break at taxpayers' expense

Ironic that Beazer's profit after this gift is almost as much as the company agreed to pay the government in a mortgage fraud settlement.

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Beazer Homes Posts $48 Million First-Quarter Profit

Feb. 5 (Bloomberg) -- Beazer Homes USA Inc., an Atlanta - based builder of entry homes, reported a fiscal first-quarter profit after receiving a tax benefit.

Net income in the three months ended Dec. 31 was $48 million, or $1.17 a share, compared with a loss of $80.3 million, or $2.08, a year ago, Beazer said in a statement today. Excluding the tax gain, the company had a loss of $53 million.

A change in U.S. law allowing builders to carry back losses related to land sales for five years is helping homebuilders such as Lennar Corp. and M.D.C. Holdings Inc. report profit for the most recent quarter. D.R. Horton Inc., the second largest U.S. homebuilder, said it was profitable in the period without the tax break.

“We were encouraged by the improvement in our new home sales,” Chief Executive Officer Ian J. McCarthy said in the statement. “It is premature to signal the beginning of a sustainable recovery in the housing market.”

Revenue from homebuilding fell 1.5 percent to $214 million as an 8 percent increase in houses sold was offset by an average decline of 8.8 percent in selling prices.

Beazer fell 6.6 percent to $4.11 in New York Stock Exchange composite trading yesterday. The stock has risen almost five- fold in the past 12 months, making it the best performer among the seven companies in the Russell 2000 Homebuilding Index.

http://www.businessweek.com/news/2010-02-05/beazer-homes-posts-48-millio...
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Beazer settles criminal mortgage fraud with government for over $50 million last year:

Govt press release: http://www.justice.gov/usao/ncw/press/beazer.html

NYT coverage has links to some of the documents: http://www.nytimes.com/2009/07/02/business/02beazer.html