Quick Hits: Lennar Gets a Beatdown in Downbeat Housing Market
Brief scrutiny of today's headlines.
A narrower loss passes for good news in the chronically downbeat housing market.
Homebuilder Lennar (LEN) says its loss for the third quarter narrowed, but revenue declined by more than 50%.
The company lost $89 million, or $0.56 a share, compared with a loss of $513.9 million, or $3.25 a share for the same period a year ago. But revenue fell to $1.11 billion from $2.34 billion, a drop of about 52.5%.
Wall Street analysts expected Lennar to lose $0.52 per share on revenue of $1.07 billion. The company says it has aggressively cut costs by reducing staff and consolidating operations.
"While the housing market continues to search for a bottom, we have been making significant progress to improve our basic operations," Stuart Miller, Lennar's president and CEO, said in a prepared statement.
"We continued to focus on the execution of an efficient homebuilding model through the repositioning of our product to meet today's consumer demand and by aggressively reducing our construction costs," Miller said. "We ended our third quarter with $857 million in cash and no outstanding borrowings under our credit facility, while we reduced our maximum unconsolidated joint venture recourse debt to $630 million, a decrease of 22% from the end of our second quarter."
Lennar is second only to D.R. Horton (DHI) in sales and leads other major builders, including Pulte Homes (PHM) and Centex (CTX). Lennar is active in about 16 states, including hard-hit California and Florida.
Lennar builds detached homes for first-time buyers and move-up buyers. The average price of the company's houses is about $297,000.
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