â¢Lennar Loss Doubles on Higher Interest Costs, Lower Revenue; Shares Slide Slides (Update1) Share | Email | Print | A A A By John Gittelsohn and Peter Woodifield Sept. 21 (Bloomberg) -- Lennar Corp., the third-largest U.S. homebuilder, reported a bigger-than-expected third-quarter loss as revenue dropped and interest costs increased. The company said it will probably become profitable next year. The net loss for the three months ended Aug. 31 widened to $171.6 million, or 97 cents a share, from $89 million, or 56 cents, a year earlier, the Miami-based company said in a statement today. The average estimate by 14 analysts in a Bloomberg survey was for a loss of about 51 cents a share. Lennar has reported 10 straight quarterly losses and, like most companies in the industry, is struggling to balance its books by selling land and cutting costs. Four months of gains in new home sales has encouraged builders such as Lennar, Meritage Homes Corp. and KB Home to resume property purchases as they anticipate a recovery. âAssuming the economy continues to stabilize, we believe our improved sales environment should enable us to return to profitability in fiscal 2010,â Chief Executive Officer Stuart Miller said in the statement. Homebuilding revenue fell 42 percent in the third quarter to $643.6 million, Lennar said. Interest payments rose 47 percent to $40.7 million. New Orders New orders fell 8 percent from a year earlier, the smallest decline since the quarter ended November 2006, Miller said. Lennar started construction on more homes in the third quarter, which will lead to higher deliveries in the fourth. The backlog of homes under contract and not yet sold was the highest in a year at $647 million. The cancellation rate fell to 19 percent from 27 percent a year earlier. âThe company is moving in the right direction,â David Goldberg, an analyst with UBS Securities LLC in New York with a âneutralâ rating on the stock, said before the report. Realtors, bankers and homebuilders are lobbying Congress to extend an $8,000 federal tax incentive for first-time homebuyers, saying boosted property sales. The credit is scheduled to expire in November. Construction Climbs New-home construction rose nationwide in August to an annual pace of 598,000 units, the fastest rate since November 2008, the Department of Commerce reported Sept. 17. So far this year, the 12-member Standard and Poorâs Supercomposite Homebuilding Index gained 40 percent through Sept. 18. Lennarâs shares climbed 91 percent in the same period. Housing affordability rose to a two-decade high in April, according to records dating to 1989 supplied by the National Association of Realtors. Payments for newly purchased homes accounted for an average 14 percent of household income that month. In July, Lennar pledged $140 million for a 15 percent share of Landsource Communities Development LLC, which includes the 15,000-acre Newhall Ranch north of Los Angeles. The company sold a stake in Landsource in 2007 for about $900 million to the California Public Employeesâ Retirement System. Lennar reinvested as part of an agreement to remove Landsource from bankruptcy. To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net. Last Updated: September 21, 2009 07:48 EDT
The company sold a stake in Landsource in 2007 for about $900 million to the California Public Employeesâ Retirement System. ----------------- Sheesh, Those funds in CA buy anything and everything. What a mockery of tax payer dollars. Show me a hedge fund blow up and you'll find Calpers, etc owns a part of it. lmao
What a bunch of shameless pigs. They crashed the economy and now they want help? Sure, how about we fund this tax credit with a special excise tax on real estate commissions, transfers & mortgage origination's. 1% from each should be sufficient.
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