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."