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Lennar reports steep losses

Home builder loses $120M in second quarter

Posted: June 27, 2008 2:05 a.m.
Updated: August 28, 2008 5:01 a.m.
 
Lennar Corporation, one of the nation's top home builders and partial owner of Newhall Land and Farming Co. in Valencia, reported a second quarter net loss of $120.9 million, or $0.76 per diluted share, on Thursday.

The steep drop comes after the first quarter's net loss of $88.2 million.

The amount is a decrease from the second quarter of 2007, which was $244.2 million or $1.55 per diluted share.

"Consistent with our expectations, the housing market has continued its downward trend throughout our second quarter," Stuart Miller, president and chief executive officer of Lennar Corp., said in a statement. "Foreclosures have increased while higher unemployment and diminishing consumer confidence have defined overall economic weakness.

As a result, the housing market has continued to experience growth in inventory levels, which has depressed the price of homes and restricted the ability to sell those homes in markets across the country."

Revenues from home sales decreased 62 percent in the second quarter of 2008, which ended May 31, to $1 billion from $2.7 billion in 2007. The company credits the slip in revenues to a 58 percent decrease in the number of home deliveries and an 8 percent decrease in the average sales price of homes delivered in 2008. New home deliveries, excluding unconsolidated entities, decreased to 3,729 homes in the second quarter of 2008 from 8,940 homes last year.

In the statement, Miller offered an outlook for the remainder of the year: "We recognize that the remainder of 2008 will likely see further deterioration in overall market condition; however, we are confident that we remain well positioned with a strong balance sheet and properly scaled operations to navigate the current market downturn as a leaner and more efficient home builder."

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