Builder Beazer Homes USA posted a quarterly net loss, weighed down by charges for inventory impairments and abandoning land option contracts.
Beazer also said it has "yet to see any meaningful evidence of a sustainable recovery in the housing market."
For the first quarter ended Dec. 31, the sixth-largest U.S. home builder reported a loss of $59 million, or $1.54 a share, compared with a year-earlier profit of $89.9 million, or $2.20 a share.
Excluding the $119.9 million in charges, earnings were $15.9 million, or 41 cents a share, the company said.
Analysts had expected Beazer to earn 26 cents a share, according to Thomson Financial.
The Atlanta-based company said conditions remained extremely challenging during the quarter, with most markets seeing lower demand, higher cancellations, and significant discounting, which crimps profit margins.
Sales slid to $806.4 million from $1.1 billion. Analysts were looking for revenue of $720.6 million, according to Thomson.
During the quarter, the company closed on the sale of 2,660 homes, down 31%, reflecting both weaker demand and higher cancellation rates.
New orders during the quarter fell by half to 1,779, Beazer said.
The company said it expected 2007 closings to come in at the bottom of its previously announced range of 12,000 to 13,500.
Beazer estimated it would earn between $1.25 and $1.50 a share, before special charges, this year.
On average, analyst expect earnings of $2.47, Thomson said.
Beazer will host a conference call and webcast to discuss the report at 11:00 am New York Time.