Miami, FL, September 26, 2006—Homebuilder Lennar reported third quarter earnings that dropped 39 percent due to a continued slowdown in the housing market. Lennar also lowered guidance for the fourth quarter as it limits its land purchases and works to lower inventory.
The company's net earnings fell to $206.7 million, or $1.30 per share, from $337.3 million, or $2.06 per share, in the year-ago period.
Quarterly revenue climbed 20 percent to $4.18 billion from $3.5 billion, as home deliveries rose in every region, and the average sale price of homes delivered also increased. However, new home orders were down slightly from a year ago.
The company reported a 39 percent decrease in earnings from continuing operations and a 31 percent rise in costs of homes sold, land sold and general and administrative expenses compared to last year.
Analysts polled by Thomson Financial were looking for third-quarter earnings of $1.28 per share on sales of $3.72 billion. Third-quarter results were within the company's previously announced revised goal of $1.25 to $1.35 per share.
"The U.S. housing market has continued to deteriorate, trailing down further and faster than anticipated," Lennar President and Chief Executive Stuart Miller said in a statement. "We have limited our land purchases and reduced standing inventory through strategic asset management. Additionally, we have emphasized salesmanship and simplicity in the field which help control costs in the management of our business."
Lennar cut fourth-quarter earnings guidance to a range of $1 to $1.30 per share due to current market conditions. Analysts currently forecast much higher quarterly earnings of $1.60 per share for the fourth quarter.
