Tags: US | Earns | Lennar

Lennar Posts Smaller Loss on Lower Costs

Wednesday, 24 Mar 2010 08:45 AM

Lennar Corp. said Wednesday that its fiscal first-quarter loss narrowed as the homebuilder offered fewer sales incentives and trimmed costs.

Lennar said the housing market is stabilizing, as seen by improved traffic, increased backlog and lower cancellation rates during the quarter. The company, based in Miami, said it's on track to post a profit for fiscal 2010.

Lennar reported a loss of $6.5 million, or 4 cents per share, for the period ended Feb. 28. That's smaller than its loss of $155.9 million, or 98 cents per share, a year ago.

Analysts surveyed by Thomson Reuters, whose estimates typically remove one-time items, predicted a much bigger loss of 30 cents per share.

President and CEO Stuart Miller said in a statement that Lennar was able to improve its quarterly gross margin by lowering construction costs and trimming sales incentives.

Sales incentives offered to homebuyers improved to 12.5 percent of home sales revenue, down from 17.1 percent in the year-earlier quarter.

Many homebuilders implemented a flurry of sales incentives during the recession in order to tempt potential buyers into making purchases. Consumers have been hesitant to buy homes due to concerns about high unemployment levels and unstable economic conditions, coupled with tightening credit.

Selling, general and administrative expenses fell 20 percent mostly on lower fixed costs.

Revenue slipped 3 percent to $574.4 million from $593.1 million, topping Wall Street's forecast of $568.2 million.

Revenue from home sales dipped 2 percent on fewer home deliveries excluding unconsolidated entities, which was somewhat offset by a higher average sales price. New home deliveries, excluding unconsolidated entities, fell 7 percent to 1,988 homes from 2,136 homes a year ago.

The average sales price of delivered homes rose 6 percent to $258,000 from $244,000 mostly on an increase in deliveries in the West, particularly in California.

Miller said Lennar is upbeat about improving market conditions, even though homebuyer tax credits — $8,000 for new buyers and $6,500 for those who have previously owned a home — are set to expire at the end of April. Miller said affordable prices and improving consumer confidence levels should offset the absence of the tax credits over time.

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Lennar Corp. said Wednesday that its fiscal first-quarter loss narrowed as the homebuilder offered fewer sales incentives and trimmed costs.Lennar said the housing market is stabilizing, as seen by improved traffic, increased backlog and lower cancellation rates during the...
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Wednesday, 24 Mar 2010 08:45 AM
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