Lennar said losses for the quarter ended Aug. 31 totaled $513.9 million, or $3.25 per share, compared with a profit of $206.7 million, or $1.30 per share, in the 2006 period. Latest-quarter results included a charge of $3.33 per share related to valuation adjustments and writing off land option deposits, among other items.
Revenue fell 44 percent to $2.34 billion from $4.18 billion a year ago, primarily due to a 41 percent drop in the number of home deliveries and a 6 percent decrease in the average sales price of homes delivered in 2007.
Analysts surveyed by Thomson Financial had expected Lennar to post a loss of 55 cents per share on revenue of $2.39 billion. Wall Street estimates typically exclude one-time charges and gains.
It shouldn't surprise anyone that a homebuilder posted a loss. However, notice the following.
1.) Revenue dropped 44% -- that's a huge drop. We're not talking about a slight "we can make that up with aggressive pricing" kind of drop. This is a drop of almost 50%. At the least this indicates the housing recession isn't anywhere near over.
2.) There is something seriously wrong with analyst projections. They got the revenue right (or close enough) but their EPS was way off.
One final point from the report:
Lennar said it has cut its work force to date by 35 percent and expects continued job cuts in the fourth quarter.
I'm now very curious as to what that number is for the other homebuilders out there.
