MIAMI-Still reeling from the housing market slump, locally based Lennar Corp. has reported a $1.3-billion net loss, or $7.92 per diluted share, for the fourth quarter and a $1.9-billion, or $12.31 per diluted share, net loss for 2007.
By comparison, Lennar reported a $195.6-million net loss, or $1.24 per diluted share, for the fourth quarter 2006 and net earnings of $593.9 million, or $3.69 per diluted share, for that year. Lennar’s fourth quarter and fiscal year ends Nov. 30. “2007 has been a very tough year for homebuilders,” said Lennar president and CEO Stuart Miller during a conference call Thursday. “Our fourth quarter results reflect a difficult and arduous realignment of our company with the current market conditions.”
Revenues from home sales decreased 51% in the fourth quarter to $2 billion from $4 billion in 2006. Revenues were lower primarily due to a 49% decrease in the number of home deliveries and a 4% decrease in the average sales price of homes delivered in 2007. New home deliveries decreased to 6,810 homes in the fourth quarter compared to 13,285 in 2006.
For the year, revenues from homes sales decreased 36% to $9.5 billion from $14.9 billion in 2006. Revenues were lower primarily due to a 33% decrease in the number of home deliveries and a 6% decrease in the average sales price of homes. New home deliveries were 31,582 in 2007 and 47,032 homes in 2006.
Among ways that Lennar is seeking to address market conditions and position itself for the future is the review of joint venture partnerships and the conversion of some assets into cash. With that strategy in mind, Lennar and Morgan Stanley Real Estate Fund II, LP formed a strategic land investment venture in November to acquire, develop, manage and sell residential real estate. Lennar acquired a 20% ownership interest and 50% voting rights in the land investment venture. Concurrent with the formation of the land investment venture, the company sold a diversified portfolio of its land to the venture for $525 million.
“Our overall strategy during the quarter was to address component parts of our asset base while we strived to turn assets into cash,” Miller said. “While the [Q4] results were disappointing, we made a great deal of progress in dealing with 2008 and beyond.”