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MIAMI-With the housing market still reeling, locally based Lennar Corp. reported a $513.9-million loss, or $3.25 per diluted share, for the third quarter, in a conference call Tuesday. This compared with net earnings of $206.7 million, or $1.30 per diluted share, for the third quarter in 2006.
The company reported that revenues for the quarter of $2.3 billion, reflecting a 44% drop. “These continue to be very difficult times in the homebuilding industry,” said Lennar Corp. president and CEO Stuart Miller during the call. “There are times when the market speaks loudly and clearly to retrench and this is one of those times.”
Lennar delivered 7,636 homes during the quarter, a 41% drop from a year ago, and reported new orders of 5,804 homes, a figure which represents a 48% drop over last year and a 32% cancellation rate. Although there is demand for housing, the inventory of homes on the market for sale is having a great impact. In some cases, sellers are offering deep discounts to clear inventory. “In most markets, there continues to be a push to clear standing inventory,” Miller said, who adds that it is difficult to determine when inventory levels will return to more normal levels.
To respond to the weak housing market, Lennar has adjusted its pricing to meet current market conditions. “The net effect has been a continued deterioration of our net margin and accordingly, higher impairments to our inventory,” Miller said.
Miller added that although recent interest rate cuts by the Fed may restore some consumer confidence in housing, it is not a panacea for the market.
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