Lennar Corporation (LEN) one of the nation’s largest home builders, predicts a return to profitability in 2010 as it targets the hot market of first time homebuyers and those looking for more bang for their buck.
The company reported third-quarter results today which surprised on the Zacks Consensus Estimate by 27 cents even as new orders fell 8% year over year.
Earnings per share were a loss of 21 cents compared to the Zacks Consensus Estimate of a loss of 48 cents.
The company saw improvement during each month of the quarter as well as sequentially.
Despite the forward-looking optimism, the declines continued across most metrics compared to the third quarter of 2008. Revenues continued to fall, sliding 35% compared to the year ago period. Deliveries sank 29% to 2,691 while new orders fell to 3,104.
The decline in new orders, however, was the smallest percentage year over year decline since Nov 2006.
The company did see improvement in the cancellation rate which fell to 19% from 27% in the year ago period. It also ended the quarter with the highest backlog since Aug 2008.
Lennar said it saw consumer sentiment improve significantly. The return to profitability in 2010 assumes the economy continues to stabilize.
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