Reuters Reports "Gafisa Sees Steep Drop In Home Sales...." In Comparison With Last Q3
Reuters reports the following regarding GFA's release of its preliminary Q3 earnings. It's headline and reported as if the drop in home sales and new launches is alarming. But isn't this exactly what GFA management said they were going to do in order to restructure? They were not going to slow expansion and decrease starts. What's amazing is that GFA is actually sticking to plan, and at least as of last quarter, was profitable given a slow market and serious overrun issues last year. Seems very healthy to me? What are others' take on this. Perhaps this explains Goldman's "sell" advisory on Oct 2?? Thoughts?.........
From Reuters, October 8, 2012 8:37 p.m.EDT: ..... Headline:...Brazil's Gafisa sees steep drop in home sales, new launches....**** Sales fall 34 pct, new launches plummet 57 pct...**** Drop in line with turnaround plan amid weak demand..................................................Oct 8 (Reuters) - Brazilian homebuilder Gafisa's sales and project launches plunged in the third quarter, according to a regulatory filing, as the company focuses on a turnaround plan to address weaker demand for new housing.
Sales during the quarter fell to 689.4 million reais ($339.6 million), a 34 percent drop from a year earlier, the company said. New launches dropped to 451.9 million reais ($222.6 million), a 57 percent decline.
Brazil's market for new homes has cooled over the past year as Latin America's biggest economy stagnated, leaving homebuilders to grapple with slowing demand after years of blockbuster growth.
After startling investors early in the year with a sharp and sudden drop in volumes, Gafisa embarked on an overhaul of its troubled Tenda unit, which focuses on low-income housing, and slowed expansion of some of its other businesses.
In Monday's filing with Brazil's stock market regulator the company said the continued reduction in sales and project launches was in line with "the implementation of the turnaround strategy."
($1 = 2.03 Brazilian reais) (Reporting By Juliana Schincariol; Writing by Paulo Prada; Editing by Richard Pullin)