PH Austin, TX plant?

[Scott]

They are not "losing" money on the sale of homes. What these manufacturers lose money on is service related stuff. The number of homes that are being sold are not offsetting the cost of service calls and such that are being made. If the plant can keep a back log of around 6 floors/day, the cost of building them and paying the factory employees should balance out and make the manufacturing side a little money as well. The problem with losing money usually lies with service in that case. Saying that PH is losing $500/home sold last quarter is a little misleading as I know they are not selling them under invoice.

[rmurray]

I have owned business before...and am a major stock holder now in many individual stocks...

Both owners...and stockholders...care little about gross profits..the number you are referring to...the only profit is net profit after expenses....

For instance...if a dealer buys a home for 20K and sells it for 40 K..Is that a 100% mark up????????...I doubt it...he has to add to his expenses the a/c...skirting...land prep..hook ups...commissions...set up parts and labor..on and on...this might be easily as high as 12K...Does that mean he made 8K profit...I doubt it..he still has all kinds of expenses not related directly to a particular sale....such as model home costs..rent..lights..insurance..salaried employees..local government taxes and compliance costs..on and on...usually about $6000 per house when they are selling about 6 home per month...That might leave a profit of about $2000 for the above house...Now remember for corporate stores..income taxes are about 45% of this..the balance might be considered profit for an owner or stockholder..About 2.5% for the sale..This would be considered an excellent profit margin in our industry..