Lennar posts first quarterly profit since early 2007
Home-building titan Lennar Corp. said Thursday that it had posted its first quarterly profit since early 2007, when the housing market fell off a cliff.
But the Miami builder is still losing money from operations, earning a net profit only after booking a $320-million tax gain. The company said net income for the three months ended Nov. 30 was $35.6 million, or 19 cents a share, compared with a loss of $811 million, or $5.12 a share, during the same period in 2008. The company posted revenue of $913.7 million, a 29% decline from the fourth quarter of 2008.
The company’s stock closed at $15.46, up $1.76, or 12.85%.
Lennar continues to struggle with competition from cheap foreclosure homes and other troubled properties. The market for new homes in the U.S. remains tenuous and heavily reliant on government aid, and many experts expect the market to be rocky in coming months.
As a sign of what could come, sales of all new homes in November plunged 11.3%, the government recently reported. The drop reflected uncertainty over a first-time home buyer tax credit that was initially set to expire Nov. 30. Federal lawmakers in November extended it through April and expanded it to include some buyers who already own a house.
But the extension didn’t come in time to entice purchasers to commit to entering into new-home contracts in November, and many experts believe that response to the extension of the credit will be muted or, at best, won’t translate into another pickup in sales until the spring as the new deadline approaches.
The housing market has shown some signs of stabilization that will probably continue, given government support, Lennar Chief Executive Stuart Miller said in a statement Thursday.
“During the fourth quarter, the overall housing market continued to move toward stabilization as more confident home buyers took advantage of increased affordability and the $8,000 federal tax credit,” he said. “While we continue to adapt our business in light of the current economic landscape and its challenges, we are optimistic that home buyers have recognized that the residential housing market is improving and will continue to take advantage of the extended housing stimulus.”
For the fiscal year ended Nov. 30, the company posted a loss of $417.1 million, or $2.45 a share, compared with a loss of $1.1 billion, or $7 a share, in 2008. The company’s 2009 revenue was $3.1 billion, down 32% from 2008.