[size=3][FONT=Times New Roman]Lennar scraps outlook as profit falls
Tue Mar 27, 2007[/FONT][/size]
NEW YORK (Reuters) - Lennar Corp. <LEN.N>, the No. 3 U.S. home builder, said on Tuesday quarterly profit tumbled a further-than-expected 70 percent, reflecting the downward spiral of the U.S. housing market.
[size=3]The company does not expect to achieve its 2007 earnings goal and did not set a new target. It said the subprime lending crisis exacerbated housing market weakness.
“Until we see prices stabilize… we will not be able to project the timing or the scope of margin recovery,” Stuart Miller, president and chief executive officer, said in a statement.
For the fiscal first quarter ended February 28, Lennar said it earned $68.6 million, or 43 cents per share, down from $258.1 million, or $1.58 per share in the year earlier quarter.
Analysts had expected it to earn 55 cents per share.
Revenue fell 14 percent to $2.8 billion. Homebuilding operating earnings dropped 69 percent to $140.0 million and new home orders fell 27 percent to 7,132 homes.
Lennar’s performance was a key factor for stocks on Tuesday, given the market’s high sensitivity to housing and the troubles in the subprime mortgage arena.
Futures on the S&P 500 index weakened immediately after the results were announced.
U.S. home sales fell unexpectedly in February, data released on Monday showed, hitting their lowest level in nearly seven years and raising concerns the troubled housing sector had not yet hit bottom.
-Just another tip of the iceberg story, the bottom appears to be a long way off.[/size]