Lennar Posts Quarterly Loss Shares Fall Over 3%, Housing Market Improving
Posted on | September 21, 2009 | No Comments
Lennar Corporation, one of the largest home builders in America based out of Miami, posted a quarterly loss of $172 million. Even with the loss Lennar feels that the housing market is improving. The losses were extended due to the write down on the value or its land and unsold homes. Customer orders were down eight percent from the previous year but new orders increased each month during the quarter.
“The overall housing market continued its road back to recovery as more confident homebuyers took advantage of increased affordability,” said CEO of Lennar Stuart Miller. The company did not give any future guidance but it did state that they plan to return to profitability in the fiscal year of 2010. The company was down 29% in homes sold to 2691 with the average home selling for $239,000 which was down 11%.
Strong demand allowed Lennar to reduce the amount of incentives compared to last year. With this being the case the company still reported a loss of $171.6 million or 97 cents per share for the quarter that ended in August. Revenue also fell from $1.11 billion a year ago to $720.7 million; this 35% drop is one of the main reasons we are seeing the stock sell off in early trading.
Analysts were expecting a loss of $774.4 million and 46 cents a share. Lennar is optimistic about the future stating that they plan to make money in fiscal 2010. The housing market has gotten better in several areas of the country but we have yet to see the true bottoming out that all home builders would like to see. When bubble markets like Phoenix, Las Vegas and Miami finally see some steady gains then home builders will start to become profitable again.
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Author: Jeremy North
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