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Investors Cheer as Lennar (LEN) Swings to Q2 Profit of 21c/Share

June 24, 2010 1:53 PM EDT
Lennar Corp. (NYSE: LEN) reversed its year-ago loss as it cut costs despite the expiration of the Federal homebuyer tax credit in April slowing May results and holding back the company’s second-quarter revenue.

The new homebuilder reported fiscal second-quarter earnings of $39.7 million or 21 cents per share, compared to a loss of $125.2 million or 76 cents per share in the same quarter last year. Analysts had been looking for the company to break even in the quarter.

Revenue for Lennar fell 9 percent to $814.5 million in the three month period ended May 31 from $891.9 million last year, but missed the market consensus of $835.54 million.

New orders for homes for Lennar fell 10 percent from 2009, hampered by the significant drop off in May.

“During the second quarter, we continued to see a housing market that was trying to stabilize,” Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said. “As expected, this stabilization process was impacted by the expiration of the Federal homebuyer tax credit at the end of April. As a result, our new sales orders for the quarter were down 10% from the prior year, with the entire decline coming in the month of May. While we were disappointed with the slowdown in new orders in May, we believe that this will be temporary and that the market will improve in the second half of 2010.”

The results from Lennar come one day after the Commerce Department reported that the sales of new homes fell 33 percent to the lowest level on record.

Shares of Lennar are up 1.3 percent to $14.93 today.

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