Signs that the housing market is gaining traction have yet to pull Lennar Corp., one of the nation’s largest homebuilders, out of the red.
The Miami-based homebuilder (NYSE: LEN and NYSE: LEN-B) said it lost $171.6 million, or 97 cents a share, on revenue of $720.7 million for the third quarter ended Aug. 31. A year ago, it reported a net loss of $89 million, or 56 cents a share, on revenue of $1.11 billion.
The third quarter results included write-downs totaling 76 cents a share.
Analysts polled by Thomson Reuters expected a 46-cent loss on revenue of $774 million.
Lennar was the area’s fifth-largest homebuilder in 2008, selling 277 homes in the six-county Sacramento region with a 5.7 percent market share, according to analyst Hanley Wood Market Intelligence.
Lennar president and chief executive officer Stuart Miller said the overall housing market is on the “road to recovery.”
“While high unemployment and foreclosures will continue to present challenges, consumer sentiment has significantly improved as homebuyers have recognized that the residential housing market is stabilizing,” he said.
Miller said the company’s strategy is to target first-time buyers and bargain-hunters, which are helping new home orders rise each month. New orders were still down 8 percent in the third quarter, but that decline was the smallest percentage year-over-year decline since November 2006.
“In order to capitalize on the improvement in our sales pace, we increased our home starts during the quarter, which will lead to higher deliveries in the fourth quarter,” Miller said. “We are also encouraged by the continued improvement in our cancellation rate.”
The cancellation rate dropped to 19 percent from 27 percent, gross margin on home sales shrunk to 15.6 percent ($98.9 million) from 18 percent ($179.4 million).
Third-quarter home sales revenue in the third quarter decreased 36 percent, to $635.3 million from nearly $1 billion in 2008. The drop was mostly due to a 28 percent decrease in home deliveries and a 12 percent decrease in the average sales price of homes delivered.
Year-over-year, the average sales price was down by $30,000 – to $239,000.
