Lennar saw sales drop in the third quarter, but the national home builder managed to narrow its losses in continuingly severe market headwinds.
Lennar posted losses of $89 million compared with $513.9 million in losses reported in last year’s third quarter. Total revenue, both from the company’s home-building and mortgage units, fell 53 percent to $1.11 billion, from $2.34 billion in the prior-year quarter.
Deliveries of homes fell 49 percent in the quarter, and the average sale price of homes fell 9 percent.
CEO Stuart Miller told investors that the federal government’s housing stimulus bill has so far not been effective in stabilizing the market.
"While we expected the housing market to remain constrained throughout the third quarter, the weakness in the market actually accelerated as a result of increased foreclosures, weakened consumer confidence and tightened mortgage lending standards," Miller said in a statement.
Miller said that the landmark housing stimulus bill enacted in July, which included a new $7,500 maximum tax credit for home buyers, hasn’t yet made a serious impact in the lagging home market. He said, however, that the builder ended the third quarter with $857 million in cash, with no outstanding borrowings under its credit facility. The builder also reduced debt from its failed joint-venture agreements, another important indicator of the company’s health compared with other big builders -- such as Technical Olympic USA and Woodside Homes -- that have declared bankruptcy in recent months.
"As we enter the fourth quarter of 2008, we remain well-positioned with a strong balance sheet and properly scaled operations,” Miller said, “to navigate the current market as a leaner and more efficient home builder.”