Lennar reverses loss in 2nd quarter, sales slum -
Posted on : 26-06-2010 | By : admin | In : Dsquared
Tags: Roca Wear, ugg
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The Miami company said net income totaled $39.7 million, or 21 cents per share, in the period ended May 31. That compares to a loss of $125.2 million, or 76 cents a share, the same quarter last year.
Chief Executive Stuart Miller said new home orders got progressively weaker in the March-May quarter once the government incentives expired at the end of April. But he noted demand appears to be improving this month and he stressed the company should remain profitable this year.
Revenue fell 9 percent to $814.5 million.
The big question builders face is when will demand pick up again now that that there is no government stimulus creating a sense of urgency for buyers.
“As we’ve gone through May and into June, we feel demand is starting to make a modest recovery,” Miller said.
New home orders fell 10 percent to 3,207,ugg, with the entire decline coming in May. Completed home sales slipped 8 percent from a year ago to 2,912 homes.
The company cut corporate, general and administrative expenses by 22 percent during the quarter.
Low mortgage interest rates and homebuyer tax credits helped support sales and home orders for Lennar and other builders this spring. But the tax credits — $8,Roca Wear,000 for first-time home buyers and up to $6,500 for current homeowners — ended in April, pulling sales that would normally have taken place in May or June ahead to March and April.
Still, Miller said demand is improving.
Lennar shares edged up a penny to $14.75 in afternoon trading after falling as low as $14.33 earlier in the sesison.
“We continue to be inclined to believe that the current pullback in demand is temporary and the void left by the expiration of the tax credit will be filled in the upcoming months by purchasers looking to take advantage of historically low interest rates supporting the purchase of extremely well priced homes,” Miller said.
Even if demand for new homes lifts in coming months, the housing market will remain “rocky and sloppy” in the face of a sluggish economy, high unemployment and foreclosures, he added.
Results were boosted by an income tax benefit of $11 million.
Lennar has operations in 17 states and sells homes for entry level and move-up buyers as well as retirees. Its Rialto Investments unit buys distressed real estate investments.
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Online:
Lennar Corp: http://www.lennar.com/
LOS ANGELES – Lennar Corp. said Thursday it bounced back from a year-ago loss in its fiscal second quarter, but the end of federal homebuyer tax credits hurt the homebuilder’s new home orders and contributed to a 9 percent drop in revenue.
Analysts polled by Thomson Reuters were expecting the Miami company to break even on roughly $835.5 million in revenue.
Nationally, sales of new homes collapsed in May, sinking 33 percent to the lowest level on record.
The builder reported a 10 percent drop in new home orders for the latest quarter, and said orders this month are running as much as 25 percent below a year ago.



