MIAMI-Despite a slowdown in the homebuilding market, Lennar Corp. has reported earnings of $324.7 million for the second quarter, up 39% from the same period last year. Earnings per share were $2, compared to $1.42 a year, an increase of 41%.

In a conference call Monday, Lennar Corp. president and CEO Stuart Miller said the company has addressed softening market conditions through a "balance sheet first approach."

"We have kept our inventory low while we continue to close homes. Our $4.6 billion in revenue has been maintained to avoid buildup of inventory," Miller says.

Revenues from homes sales increased 53% in the second quarter to $4 billion from $2.6 billion a year ago. Revenues were higher primarily due to a 40% increase in the number of home deliveries and a 10% increase in the average sales price of homes delivered in 2006. New home deliveries reached 12.506 homes in the second quarter, up from 8,951 last year. The average sale price of homes increased to $322,000, up from $293,000 last year.

Gross margins on home sales were $946.5 million, or 23.5% in the second quarter compared to $654.1 million, or 24.9%, a year ago. Gross profit on land sales totaled $41.1 million in the second quarter of 2006 compared to $72.7 million a year ago. "Although current market conditions have softened, we believe favorable demographic trends and high employment levels bode well for long-term homebuilding fundamentals," Miller says.