Lennar posts slightly larger 2nd-quarter loss

[June 25, 2009]  MIAMI (AP) -- Lennar Corp. reported a slightly larger second-quarter loss than a year ago Thursday as the homebuilder took some writeoffs to adjust land and inventory values and dealt with fewer home deliveries and a drop in new orders.

While consumers did buy more new homes than in the first quarter, President and CEO Stuart Miller said in a statement that increased unemployment, rising foreclosures and stricter credit standards still weighed on the sector.

The Miami-based company lost $125.2 million, or 76 cents per share, for the three months ended May 31. That compares with a loss of $120.9 million, or 76 cents per share, a year earlier.

Results included 38 cents per share for valuation adjustments and other writeoffs and a 27 cents-per-share charge for a tax asset valuation allowance.

Analysts surveyed by Thomson Reuters, whose estimates typically exclude one-time items, forecast a loss of 64 cents per share.

Revenue dropped to $891.9 million from $1.13 billion partly on fewer home deliveries, but still managed to beat Wall Street's $597.5 million estimate.

The builder delivered 3,149 homes during the quarter, down 18 percent from the prior-year period. New orders also fell, dropping 19 percent to 3,564 homes. Backlog plunged 48 percent to 2,062 homes.

One bright spot was that there were fewer cancellations than a year earlier. Lennar reported a 15 percent cancellation rate for the quarter, considerably smaller than the 22 percent posted last year.

Miller said the company is working hard to get back to turning a profit, and slashed expenses and lowered construction costs to help prop up its financials. Selling, general and administrative expenses dropped 28 percent to $112.5 million from $157 million. Total costs fell to $839.3 million from $1.12 billion.

The builder also looked to entice potential buyers with incentives. Sales incentives were $52,600 per home delivered compared with $48,700 per home delivered a year earlier.

The average sale price declined to $251,000 from $274,000 in the prior-year period mostly on lower pricing.

[Associated Press]

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