reported a second-quarter loss Thursday that was wider than expected, and the company said the homebuilding industry is likely to deteriorate further this year unless the U.S. government intervenes to help stimulate consumer demand for homes.
The homebuilder's quarterly loss totaled $121 million, or 76 cents a share, wider than the 55 cent per-share loss that analysts expected, according to Thomson Reuters. A year ago, Lennar reported a loss of $244 million, or $1.55 a share.
Lennar's revenue plunged 61% to $1.1 billion, just slightly higher than Wall Street expected.
In morning trading Thursday, Lennar shares were falling 72 cents, or 4.9%, to $13.85. Other builders were weak on the report.
each were down more than 2.5%.
Lennar and other major homebuilders continue to have trouble managing costs at a time when their revenue bases are sharply deteriorating. Ongoing home price drops remain a huge impediment to the industry's return to profitability. Lennar's average selling price on closed homes fell 8% from a year ago.
New orders plummeted 45% from a year ago to 4,396 homes.
In a statement, Lennar CEO Stuart Miller sounded an alarm that the housing industry is ready for its next leg down.
"With the U.S. housing inventory growing in excess of absorption and limited credit availability, the prospect of further deterioration in the homebuilding industry will likely become reality absent Federal government action," Miller said. "To that end, we are hopeful that the Federal government will acknowledge the need for further reform and will institute programs designed to stabilize and facilitate the recovery of the housing market."
Much of the company's quarterly loss was due to new land impairment charges and writedowns to joint ventures, which together totaled $137 million.
Lennar's gross margin on home sales improved to 8.7%, compared with 7.2% a year ago, as the company benefited from selling land and homes that were written down in value a year ago.
Selling costs increased to 15.4% of revenue, compared with 14.7% a year earlier.
Later on Thursday, the National Association of Realtors will report existing-home sales data for May.
totaled 10.9 months of supply in May, up from 10.7 months in April. New-home sales across the U.S. fell 2.5% in May (from April), but were down 40.3% from a year earlier.
New-home sales across the U.S. remain slightly above the levels of the 1991 recession.