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Lennar reports seventh consecutive loss
comments (0) December 18th, 2008 in Blogs
Richard Defendorf, contributor
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Lennar Corporation’s fiscal fourth quarter ended with an $811 million loss, the builder’s seventh consecutive loss, as its fortunes continued to parallel general economic trends.
In a statement released Thursday, the Miami-based company did note that its $5.12-per-share loss for the quarter, which ended November 30, was 35 percent narrower than the $1.25 billion loss Lennar reported for the same period in 2007.
Revenue fell 41 percent to $1.3 billion, a drop Lennar said was due to a 34 percent decline in the number of home deliveries and a 10 percent reduction in the average sales price in 2008.
“Rising unemployment, falling home prices, increased foreclosures, tighter credit and volatile equity markets further eroded consumer confidence and depressed home sales,” Chief Executive Officer Stuart Miller said in the report. Echoing a strategy expressed earlier this week by Hovnanian Enterprises CEO Ara Hovnanian, Miller added: “Cash generation will continue to be our top priority. We will convert inventory to cash and reduce both our land purchases and homebuilding starts.”
Builders are trying to boost cash by cutting expenses and spending less on land to survive the slump, Vicki Bryan, senior high-yield bond analyst for Gimme Credit, told Bloomberg.
“The economy will have to at least stabilize before housing can begin to recover,” Bryan said, adding that “it really does matter who has the most in the war chest.”
posted in: Blogs, business
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