Lennar Reports Q3 Loss As Revenue Continues To Slide

September 23, 2008 6:27 p.m. EST

Miami, FL (AHN) - Lennar Corp. announced Tuesday a fiscal third quarter loss as revenue slid 50 percent. However, the loss was narrower than last year as the company has aggressively slashed business costs.

The homebuilder reported a third quarter loss of $89 million or 56 cents a share, compared to a loss of $513.9 million or $3.25 a share in the same period a year earlier. Revenue was $1.11 billion, down 50 percent from $2.34 billion last year.

Selling, general and administrative costs were cut roughly 50 percent, down $148 million from a year ago. This helped improve gross margin, which ticked up to 18 percent in the third quarter, from 15.9 percent in the second quarter.

New home orders fell 42 percent, to 3,387, with a 27 percent cancellation rate. The average sales price for a home fell 9 percent in the third quarter to $270,000. A total of 3,791 homes were delivered during the quarter, down from 7,636 homes last year.

Lennar believes they have a strong balance sheet, with an $857 million cash position.

"We feel that we're making credible progress towards profitability in the most difficult of times," said President and CEO Stuart Miller on a conference call.

Shares of Lennar fell 7.5 percent on Tuesday to $12.71 a share.