MIAMI-With continued weak conditions in the housing market, locally based Lennar Corp. reported a 69% drop in homebuilding earnings for the first quarter which ended Feb. 28.

Lennar reported earnings of $68.6 million, or 43 cents per diluted share, compared to earnings of $258.1 million, or $1.58 per diluted share, in the first quarter of 2006. "Although we are seeing sporadic firming in some markets, the reality is market conditions are still challenging at best and, in some markets, continue to deteriorate," Lennar Corp. CEO Stuart Miller said during a Tuesday conference call.

Revenues from home sales decreased 10% in the first quarter to $2.6 billion from $2.9 billion in 2006. Revenues were lower primarily due to a 4% decrease in the number of home deliveries and a 7% decrease in the average sales price of homes delivered in 2007.

The flood of homes placed on the market by speculative buyers has increased the overall supply of homes, at the same time demand for homes has weakened. "It's unclear whether there is another shoe to drop," Miller said. "Questions will remain about whether we'll see recession."

Among notable activity for the quarter was the company's LandSource joint venture admission of MW Housing Partners as a new strategic partner in February, as GlobeSt.com previously reported. The transaction resulted in a cash distribution to the company of approximately $700 million. As a result of the capitalization, the company recognized a pretax gain of $175.9 million in the first quarter of 2007 and could potentially recognize an additional $400 million in future years, in addition to profits form its continuing ownership interest.