'Soft Landing' In 'Changing Economic Environment'

A Bay Area homebuilder reported after the bell. "Brookfield Homes Corporation today announced strong financial results for the year ended December 31, 2005. Housing revenue totaled $1,074 million, compared to $1,169 million in 2004. The decrease in housing revenue is primarily due to fewer units closed during the year compared to 2004, partially offset by an increase in the average selling price." "'We believe our markets will see a soft landing, characterized by a leveling off of home prices and deliveries. Having said that, we are well positioned to maintain our strong performance by proactively managing our operations through changing economic environments,' concluded Ian Cockwell, Brookfield Homes' President and CEO." "Lots Owned and Controlled: The company's lots owned or controlled at December 31, 2005 total 29,512, an increase of 6% from inventory levels at the end of 2004. The company has also targeted to close approximately 1,500 bulk lot sales during 2006." That's a nice trick. The number of lots is up 6%, but inventory is up from $680 million to $912 million over the past 12 months. "The company expects earnings per share to grow to between $7.60 and $8.20 in 2006, from $7.04 in 2005, an increase of up to 16%. Contributing factors to the positive earnings guidance (includes) the sale to other homebuilders of lots originally held through options." "Cash flow from operating activities was $60 million in 2005, and over the past two years the company generated a total of $224 million of operating cash flow." "The company purchased, at a price of $55.00 per share, 10% or 3,000,000 shares of its outstanding common stock through a tender offer which expired in the fourth quarter of 2005. In addition, under the share buyback program, Brookfield Homes purchased a further 707,500 shares or $34 million of its common stock at an average price of $47.84 during 2005." "Brookfield Homes Corporation engages in the design, construction, and marketing of single-family and multifamily homes. The company operates primarily in five markets, including San Francisco Bay area, Southland/Los Angeles, San Diego/Riverside, Sacramento, and the Washington D.C. area." Check out these price reductions in Virginia.