Lennar Corp., the fourth-largest U.S. homebuilder by revenue, will post a fiscal fourth quarter loss after taking a pretax charge of up to $500 million to write down land it no longer intends to buy.
The loss in the three months ended Nov. 30 will be between 88 cents and $1.28 a share, the Miami-based company said today in a statement.
``Market conditions continued to weaken throughout the fourth quarter and we have not yet seen tangible evidence of a market recovery,'' Lennar Chief Executive Officer Stuart Miller said in the statement.
Homebuilders are disposing of land they planned to build on and incurring expenses as customers cancel orders amid a housing slump. While the National Association of Realtors is forecasting that five consecutive quarterly declines of previously-owned homes will end in the first quarter, home construction companies have more land than they need and more homes than they can sell.
It's possible Lennar is loading all of its losses into one quarter. That simply means they knew they were going to take a loss anyway, so they added a bunch of other future losses at the same time, essentially getting the losses over with.
However, note this statement from the CEO: ``Market conditions continued to weaken throughout the fourth quarter and we have not yet seen tangible evidence of a market recovery,'' That doesn't sound good at all.
For more on the housing "soft landing", go to the Big Picture, where the story Economy poised to shake off housing slump (except Lennar) is at the top of the page. There are two great charts that say it all: sales are decreasing and inventory is increasing.