The end of the Federal homebuyer tax credit in April slowed down Lennar Corp.'s May results and hurt fiscal second-quarter revenue, but the homebuilder reversed a year-ago loss as it cut costs.
Low mortgage interest rates and homebuyer tax credits helped support sales and home orders for Lennar and other builders this spring. But the tax credits — $8,000 for first-time home buyers and up to $6,500 for current homeowners — ended in April, pulling sales that would normally have taken place in May or June ahead to March and April.
"During the second quarter, we continued to see a housing market that was trying to stabilize," said CEO Stuart Miller in a statement Thursday. "As expected, this stabilization process was impacted by the expiration of the Federal homebuyer tax credit at the end of April."
New orders of homes fell 10 percent from 2009, with the entire decline coming in May.
Lennar Corp. said net income totaled $39.7 million, or 21 cents per share, in the period ended May 31. That compares to a loss of $125.2 million, or 76 cents a share, the same quarter last year.
Results were boosted by an income tax benefit of $11 million.
Revenue fell 9 percent to $814.5 million from $891.9 million the year before.
Analysts polled by Thomson Reuters were expecting the Miami company to break even on roughly $835.5 million in revenue.
The report comes a day after the Commerce Department said sales of new homes collapsed in May, sinking 33 percent to the lowest level on record.
Miller said he expects housing demand to improve in the second half of the year.
"The tax credit expiration accelerated sales activity to the pre-May period and it may take a couple of months for demand to rebuild," Miller said.
The company cut corporate, general and administrative expenses by 22 percent during the quarter.
Miami-based Lennar has operations in 17 states and sells homes for entry level and move-up buyers as well as retirees. Its Rialto Investments unit buys distressed real estate investments.
In thin premarket trading, shares of Lennar fell to $14.50 from Wednesday's close of $14.74.
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