Lennar Corp. (NYSE: LEN), the third-largest U.S. homebuilder by revenue, is scheduled to release first-quarter earnings before the opening bell on Tuesday, March 29 2011. Analysts, on average, expect the company to report a loss of 5 cents per share on revenue of $508.23 million. In the year-ago period, the company posted a loss of 4 cents per share on revenue of $574.44 million.
In the preceding fiscal fourth-quarter, the Miami, Florida based company's net income was $32.0 million, or 17 cents per share, compared with a profit of $35.6 million, or 19 cents per share, in the same period a year ago. Revenue dropped 6% to $860.1 million. Analysts, on average, has expected earnings of 6 cents a share on revenue of $815.75 million.
At its last earnings call in January, the company said that 2011 will be another profitable year, whether or not the economy strengthens."Lennar said that its homebuilding segment is on the right track to achieving sustainable profitability and Rialto Investments segment will enhance earnings as the housing market stabilizes and ultimately recovers."Although high unemployment, tight lending standards and low consumer confidence continue to present challenges for the housing industry, we are confident that 2011 will be another profitable year," he said. "Our homebuilding segment is on the right track to achieving sustainable profitability, and our Rialto Investments segment will enhance our earnings as the housing market stabilizes and ultimately recovers," stated CEO Stuart Miller.
Lennar has been very selective in its homebuilding, seeking areas where demand for housing exists. During its fourth quarter, Lennar gained marketshare, cut administrative and manufacturing costs and saw Rialto, its new distressed land investment business, account for $12.4 million, or 39 percent, of the bottom line. Rialto also gives Lennar an inside track for its own home-building business on land deals that have not yet hit the market, the company said.
There appears to be a continuing lack of recovery in the housing market. This week alone, data showed the pace of new-home sales fell to a near 50-year low in February while sales of previously owned homes also slumped. The median sales price of a new home is back to 2003 levels. While the broader market is still up more than 10% from a year ago, the SPDR S&P Homebuilders ETF (XHB) has trailed the S&P 500's gains.
The company's stock currently trades at a forward P/E (fye Nov 30, 2012) of 16.02 and PEG Ratio (5 yr expected) of 6.88. In terms of stock performance, Lennar shares have lost more than 33% over the past year.
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