Optimistic Lennar’s 3Q Loss Widens

Homebuilder Lennar Corp. has reported a larger-than-expected loss for its fiscal third quarter, blaming its financial outcome on sluggish home sales and the weak economy in general. However, Lennar has expressed optimism that it will be able to return to profitability by the next fiscal year on the back of improving orders and a significant backlog.
 
Lennar’s marked optimism comes as a surprise to many analysts at a time when home builders are suffering through one of the worst industry downturns in decades. The signs of recovery in the home market have started to appear, though, with potential homebuyers encouraged by plunging home prices, low mortgage rates, and Obama’s $8,000 federal income tax credit.
 
As the fourth-largest homebuilder in the USA, Lennar’s performance is an important indicator for the health of the rest of the homebuilding industry. While orders have fallen 8 percent since last year, Lennar says that this decline was the smallest in three years. The company lost $171.6 million this quarter, compared to an $89 million loss last year, on a revenue of $721 million.

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