Lennar Losses Increase Despite Sales Incentives

Miami, FL, March 31, 2009--Homebuilder Lennar Corp. said Monday it's  first-quarter losses increased 77 percent on booked charges to adjust land and inventory values, as home deliveries and new orders fell despite stepped-up buyer incentives.

CEO Stuart Miller said the company, one of the nation's largest homebuilders, continued to face negative housing market and economic trends during the quarter.

"Despite historically low interest rates and some indicators pointing toward market stabilization, low consumer confidence, increased unemployment and growing foreclosure rates negatively impacted new home sales in most of our markets," Miller said in a statement.

The Miami-based company said it lost $155.9 million, or $0.98 a share, for the quarter that ended Feb. 28. That compares with a loss of $88.2 million, or $0.56 cents a share, in the same period last year.

Revenue plunged by about 44 percent to $593.1 million, but that did top the $530.4 million expected by analysts.

Home deliveries in the quarter tumbled 40 percent from the prior-year quarter to 2,142, while the average selling price of those homes fell 12 percent to $244,000, Lennar said.

New orders declined 28 percent to 2,190 versus a year ago.

During the quarter, Lennar offered to cover mortgage payments for a limited time if a buyer loses their job. More recently, the builder began letting buyers put off payments for 12 months and has offered a fixed rate of about 3.6 percent through its mortgage financing arm on certain homes.

As a result, sales incentives Lennar offered to homebuyers totaled $50,500 for every home it delivered in the first quarter. By comparison, sales incentives totaled $48,000 for every home delivered in the same quarter last year.