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Lennar sees 62 percent drop in revenue for first quarter

Partial owner of Newhall Land reports net loss of $88.2 million.

Posted: March 28, 2008 6:03 p.m.
Updated: May 29, 2008 5:03 a.m.

The Patina neighborhood is one of the newest Lennar-Newhall Land developments in the Santa Clarita Valley.

Lennar Corporation, one of the nation's largest homebuilders and partial owner of The Newhall Land and Farming Co., reported a first quarter net loss of $88.2 million, or 56 cents per diluted share, on Thursday.

The first quarter net earnings in 2007 were $68.6 million. Overall revenues for the first quarter, which ended Feb. 29, reached $1.1 billion, down 62 percent, according to a statement.

Revenues from home sales for the Miami-based company decreased 64 percent in the first quarter to $953.1 million from $2.6 billion in 2007, according to a statement.

Revenues were lower primarily due to a 60 percent decrease in the number of home deliveries and an 8 percent decrease in the average sales price of homes delivered in 2008, the statement outlines.

In a statement, Stuart Miller, president and chief executive officer of Lennar said, "Market conditions have remained challenged and continued to deteriorate throughout our first quarter of 2008. The housing industry continues to be impacted by an unfavorable supply and demand relationship, which restricts the volume of new homes sales and, concurrently, depresses home prices in most markets across the country."

He said that the high number of foreclosures have led to an increase of home inventories and buyer demand has decreased as a result of lower consumer confidence.

Miller also offered an outlook for the rest of 2008 explaining, "As we look ahead to the remainder of 2008, we recognize that market conditions are likely to remain challenging in the near term. Accordingly, we will continue to work diligently on rebuilding margins and ultimately, profitability as well. With a longer-term perspective, we believe that government action and normal market clearing will work together to lead the housing market to stabilization and ultimately recovery."

The deep first quarter loss comes after a fourth quarter net loss in 2007 of $1.3 billion, compared to a net loss of $195.6 million in 2006, according to a statement.

Revenues from home sales decreased 51 percent in the fourth quarter of 2007 to $2 billion from $4 billion in 2006.


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