Lennar's 4Q earnings slip but top Street's view

[January 11, 2011]  MIAMI (AP) -- Lennar Corp.'s fiscal fourth-quarter net income slipped as the homebuilder delivered fewer homes and new orders declined, but its results topped Wall Street's expectations.

Lennar earned $32 million, or 17 cents per share, for the three months ended Nov. 30. That's down 10 percent from $35.6 million, or 19 cents per share, from the prior-year period which included a $320.5 million tax benefit.

Still, the performance beat the 6 cents per share analysts surveyed by FactSet expected.

Revenue fell 6 percent to $860.1 million from $913.7 million, but surpassed Wall Street's $815.7 million.

In pre-market trading Tuesday, Lennar shares rose 2.8 percent, or 52 cents, to $19.42.

Lennar said Tuesday that deliveries declined 12 percent to 3,089 homes, while new orders fell 5 percent to 2,520 homes.

Stuart Miller, Lennar's CEO, was optimistic about the current fiscal year. "Although high unemployment, tight lending standards and low consumer confidence continue to present challenges for the housing industry, we are confident that 2011 will be another profitable year," he said in a statement.

Homebuilders are a bellwether for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.

Housing sales have remained weak amid the economic uncertainty. Government tax credits propped up sales last spring, but demand weakened after the incentive expired in April. Between May and November, monthly sales of new homes in the U.S. declined or were flat four times. Even in the months when sales rose, the increases were coming off near-historic lows.

To help cope with soft housing demand, Lennar has been buying troubled loans and properties from failed banks via its Rialto Investments unit. During the quarter, Lennar acquired $740 million in mostly troubled loans and properties from three financial institutions.

Lennar, which is based in Miami, has operations in 17 states and sells homes for entry level and move-up buyers as well as retirees.

[Associated Press]

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