Lennar Corp.'s (LEN) fiscal third-quarter loss widened amid
write-downs on land and deferred tax assets as home sales remained
weak.
The sector is seeing signs the worst of the housing downturn may
have passed. Customers are returning to the market, spurred by
fallen home prices, low mortgage rates and a federal tax credit for
qualified first-time buyers. But rising foreclosures, rising
unemployment and tight credit still pose challenges.
President and Chief Executive Stuart Miller said Monday that the
housing market continued to recover as more-confident home buyers
"took advantage of increased affordability," though unemployment
and foreclosures remain a challenge. Lennar - one of the U.S.'s
largest home builders - has increased the number of home starts,
reduced the number of homes in inventory and repositioned itself
toward first-time and value-focused buyers, he added.
For the quarter ended Aug. 9, Lennar reported a loss of $171.6
million, or 97 cents a share, compared with a prior-year loss of
$89 million, or 56 cents a share. The latest period included 76
cents in write-downs, including on deferred tax assets which could
have been used to offset future profit.
Revenue decreased 35% to $721 million.
Analysts polled by Thomson Reuters most recently were looking
for a 46-cent loss on on revenue of $774 million.
Gross margin on home sales, excluding valuation adjustments,
fell to 15.6% from 18%.
Orders fell 8% from a year earlier but Miller said it was the
smallest such decline in nearly three years. Sequentially, orders
rose each month, he noted.
Deliveries excluding unconsolidated entities declined 29% from a
year earlier while the cancellation rate fell to 19% from 27%.
Shares closed at $16.54 on Friday and didn't trade premarket.
The stock is up 90% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com