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Lennar Quarterly Loss Narrows on Smaller Charges

Associated Press
Thursday, 18 Dec 2008 | 10:30 AM ET

Lennarsaid on Thursday its quarterly net loss narrowed as it cut land expenditures and tried to clear its backlog of unsold homes, sending shares of the No. 2 U.S. homebuilder up.

Lennar posted a fourth-quarter net loss of $811.0 million, or $5.12 per diluted share, down from a net loss of $1.3 billion, or $7.92 per diluted share, in the same quarter of 2007. Revenues sank 41 percent to $1.3 billion.

Reuters Estimates said that on an adjusted basis the company lost 51 cents per share, far less than the loss of $2.03 per share analysts were expecting, but it was not immediately clear if the result was directly comparable with the estimates.

"Broad-based external pressures continued to negatively impact the housing market during the fourth quarter as rising unemployment, falling home prices, increased foreclosures, tighter credit and volatile equity markets further eroded consumer confidence and depressed home sales," CEO Stuart Miller said in a news release.

"As we enter fiscal 2009, we are hopeful the new administration will approve a major stimulus package to stimulate housing demand in order to stabilize housing values, which will reduce foreclosures and stabilize the financial markets, leading to restored consumer confidence," he added.

Lennar ended with $1.1 billion in cash and no outstanding debt under its credit facility.

"We continue to believe Lennar has the requisite liquidity to withstand the downturn," wrote UBS analyst David Goldberg in a note to clients. Goldberg rates Lennar's shares "neutral."

Lennar said it cut land expenditures by almost 70 percent from the third quarter and its backlog dropped by 60 percent to 1,599 homes.

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New home deliveries fell 36 percent, new orders sank 46 percent and the cancellation rate stood at 32 percent for the quarter.

The average sales price of homes delivered sank to $262,000 from $291,000 in the same period last year.

Lennar's shares were up above $10 during morning trading on the New York Stock Exchange.

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