Lennar posts loss, shifts market focus

By Palm Beach Business.com

MIAMI — Homebuilder Lennar Thursday reported a first quarter loss of $125 million, or 76 cents a share, on revenue of $892 million, as the company the company attempts to reposition itself to attract first-time homebuyers.

A year ago, Lennar lost $121 million, or 76 cents a share, on revenue of $1.1 billion for the same period a year ago.

CEO Stuart Miller said the new home market got a bounce from lower prices, low interest rates and a variety of incentives, including the $8,000 federal income tax credit and a $10,000 California tax credit.

“While we are sensing pent-up demand in the market, rising unemployment, increased foreclosures and tighter credit standards continue to present challenges for the industry to generate sales at a more robust pace and at stabilized pricing,” Miller said “This combined with a recent spike in mortgage rates has made it difficult to predict when the market will ultimately turn the corner."

Miller also noted that Lennar:

— Ended the quarter with $1.4 billion in cash.

— Reduced its inventory of unsold homes by 53 percent to 626 from 1,321 homes at February 28.

— Issued $400 million in senior notes, retired $281 million of senior notes and generated proceeds of $126 million by issuing common stock.

"We continue to focus on returning to profitability,” Miller said.. We have made significant progress on right-sizing our business and have aggressively reduced our overhead structure.

“In addition, we have made great strides in lowering our construction costs and repositioning our product offering to target first-time and value-focused homebuyers. More efficient, smaller plans have been very well received by our customers and continue to represent an increased percentage of our deliveries."

palm beach business.com
JUNE 25, 2009 click to go home
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