If you listened to the CC for Q1, the management painted such a rosy picture for things to come. You'd get the impression they're going to be hugely profitable. Guess what? Wrong.
The company was wrong in forecasting a growing market. There was no growing, b/c there was no pricing improvement. If demand were real, the pricing should also be strong. Even tho I wouldn't use the words, "fire sales", to describe Q2, but when a real estate builder must sell down the inventories at weak prices, it's a troubling indication for the markets they serve.
A real estate builder's cost structure must include the overhead in running the business, which is and will always be much smaller than the cost of the land, building and labors.
I think we have to take a step back here....the good news is that they are on track to meet their revenue goals for 2013 which seemed like a pipe dream not six months ago. They projected a return to profitability this year, not a hugely profitable year. All of us in this for at least the next two years expect this to be a process.
Not to even mention the fact that they opened both major new developments that don't even count towards Q2.