Power Lunch

Monday - Friday, 2:00 - 3:00 PM ET
Power Lunch

What's 'Tough' for One CEO 'Sucks' for Another


Investors want straight talk from their CEOs, and a chief exec can't get much more direct than saying their company's business outlook "sucks." Speaking at an investor conference in New York Wednesday, the CEO of homebuilder D.R. Horton, Donald Tomnitz, said this 2007 -- all 12 months of it -- is "going to suck." Today on "Power Lunch," CNBC's Diana Olick took a closer look at CEO straight talk -- and how Donald Tomnitz may not be one-of-a-kind, even among homebuilder chief execs.

At a UBS conference four months ago, CEO Robert Toll of Toll Brothers said the following while CNBC cameras were rolling: "The accepted intelligence is that 2007 will suck and 2008 will do okay."

Take a look at what two other CEOs said at that same conference. They might not have said "suck," but you'll get the point:

CEO Richard Dugas of Pulte Homes said, "We’re really not positive at this point overall, although we’re running the business as though it's going to be tough for a while." And then there was Beazer Homes CEO Ian McCarthy, who said, "We think in 2007 it's still going to be tough, and I think that we're looking to retrench through 2007."

The big public builders represent a quarter of the new housing market, and are currently reporting a 25% drop in new home sales. So maybe saying the market "sucks" is just saying it like it is.