Builder: Housing woes continue to worsen

Lennar, nation's No. 3 builder by revenue, sees volume, value of sales plunge, forcing fourth straight quarterly loss.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

NEW YORK (CNNMoney.com) -- Home builder Lennar reported its fourth straight quarterly loss Thursday and warned that conditions in the battered housing market continue to worsen due to a glut of homes on the market and ongoing problems in the mortgage market.

Lennar (LEN, Fortune 500), the nation's No. 3 builder by revenue, reported a net loss of $88.2 million, or 56 cents a share, in the quarter. The company posted a profit of $68.6 million, or 43 cents a share, in the year-earlier period.

The loss was still better than what Wall Street had expected. Analysts surveyed by earnings tracker First Call had been looking for a loss of $1.07 a share.

"Lower consumer confidence has quieted demand among prospective homebuyers and deterred them from a buying decision, while contraction in the lending markets has reduced the availability of credit for those prospective homebuyers that do wish to buy a home," CEO Stuart Miller said in a statement.

Miller added that the glut of homes on the market continues to rise due to foreclosures and homeowners who have been forced to dump homes they can no longer afford.

"The housing industry continues to be impacted by an unfavorable supply and demand relationship, which restricts the volume of new home sales and, concurrently, depresses home prices in most markets across the country," he said.

Revenue from home building plunged 64% in the period to $953.1 million from $2.6 billion a year ago. The company saw the average sales price of one of its homes fall 8% to $278,000 in the first quarter, partly due to higher sales incentives it needed to offer to maintain demand. The average incentive on one of its homes reached $48,000 in the quarter, up $2,500 from a year earlier.

But what really cut into revenue was a nearly 60% drop in the number of homes delivered to customers to 3,437 from 8,566 a year earlier.

Total revenue, which includes its financing operations, fell 62% to $1.1 billion, which fell 5% short of the forecasts.

The problems hitting Lennar have been widespread through the industry. The nation's largest builders - No. 1 Centex (CTX, Fortune 500), No. 2 D.R. Horton (DHI, Fortune 500), No. 4 Pulte (PHM, Fortune 500), No. 5 KB Home (KBH, Fortune 500) and No. 6 Hovnanian Enterprises (HOV, Fortune 500) and No. 7 Toll Brothers (TOL, Fortune 500) - have all reported losses recently. On Wednesday the Census Bureau reported the lowest level of new home sales in 13 years in February. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
Graffiti about Greek crisis fills Athens' streets Artists are taking to the streets to express their views on the Greek crisis. More
My whirlwind 24 hours in Taiwan as a bridal supermodel Unlike the West, Taiwanese brides-to-be sit for hun sha ?? photo sessions before their actual wedding day. The photos are seen as a status symbol as well as a way to capture the brides' youth and glamor. More
8 startups that'll make your travel experience so much better Here are the new travel apps and services that will make trips easier, less time-consuming, and more fun for the every day business traveler. More