Monday, homebuilder Lennar Corporation (LEN) reported a wider net loss for the first quarter, hurt by lower home deliveries combined with a fall in average sale price due to low consumer confidence, increased unemployment and growing foreclosures.
Net loss for the first quarter ended February 28, 2009 widened to $155.9 million from $88.2 million in the corresponding period last year. The loss per share widened to $0.98 from $0.56 per share in the same period last year. On average, sixteen analysts polled by Thomson Reuters expected the company incur a loss of $0.64 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the recent quarter included $0.35 per share charge related to valuation adjustments and other write-offs, and a $0.36 per share charge related to a non-cash deferred tax asset valuation allowance.
The Miami-based company said revenues plunged 44% to $593.06 million from $1.06 billion in the corresponding period last year, yet exceeded the estimate of $530.38 million projected by fourteen Street analysts.
Revenue from sales of homes slid 45% to $522.80 million from $953.1 million in the year-ago quarter primarily due to a 38% decrease in the number of home deliveries and a 12% decrease in the average sales price of homes delivered in 2009. Number of homes delivered declined 40% to 2,142. New orders declined 8% to 2,190 and backlog plunged 52% to 1,647 homes.
The average sales price of homes delivered decreased to $244 thousands in the first quarter of 2009 from $278 thousands in the same period last year, primarily due to reduced pricing. Sales incentives offered to homebuyers were $50,500 per home delivered, compared to $48 thousands per home delivered in the first quarter of 2008.
Gross margins on home sales, excluding SFAS 144 valuation adjustments of $40.9 million, were $75.0 million, or 14.3%, compared to $162.9 million, or 17.1%, in the corresponding period last year.
Homebuilding operating loss widened to $126.5 million from $109.8 million in the prior year period
Financial services revenue declined to $64.03 million from $69.14 million in the year-ago period. Operating earnings for the Financial Services segment was $0.5 million compared to an operating loss of $9.7 million in the year-ago quarter. The company ascribed the improvement to lower fixed costs, which resulted from the company's focus on cost reductions in the segment's mortgage and title operations.
In its earnings release, Lennar Monday said, it has reduced the number of the unconsolidated joint ventures to 95 from 116 at November 30, 2008.
Earlier, in mid January, responding to allegations, Lennar, in an announcement, said that it never treated its joint ventures like a Ponzi scheme and has never siphoned cash from one joint venture to another. The company also noted that it never pledged its interest in any joint venture for the benefit of another.
Last week, smaller rival KB Home (KBH) reported a narrower net loss of $58.07 million or $0.75 per share compared with a net loss of $268.17 million or $3.47 per share in the year-earlier quarter. Revenues slid 61% $307.36 million from $794.22 million a year-earlier, primarily due to lower housing revenues.
LEN declined $1.55 or 15.11% and closed Monday's regular trading session at $8.71. In extended trading, LEN rose $0.09 or 1.03% and traded at $8.80. The stock has traded between $3.42 and $22.73 during the past year.
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