The U.S. housing slowdown is causing further pain for Lennar ( LEN), which slashed its fourth-quarter forecast Tuesday.

The Miami-based homebuilder now expects a loss of between 88 cents a share and $1.28 a share for the quarter ended Nov. 30, including pretax charges of $400 million to $500 million.

The charges include adjustments to the value of the company¿s inventory and write-offs of deposits on land that Lennar no longer intends to buy. Lennar is still calculating how much its inventory's value has declined.

Excluding the charges, Lennar expects to turn a profit, although a significantly smaller one than both the company and Wall Street analysts previously forecast. Lennar said Tuesday that it now expects fourth-quarter adjusted EPS of between 70 cents and 75 cents, well below the EPS guidance of $1.00 to $1.30 the company offered when it reported third-quarter earnings on Sept. 26. On average, Wall Street analysts were expecting EPS of $1.07, according to Thomson Financial.

"Market conditions continued to weaken throughout the fourth quarter and we have not yet seen tangible evidence of a market recovery," said CEO Stuart Miller, in a news release. "While we are hopeful that low interest rates, strong employment and a healthy economy will help stimulate a recovery in 2007, we have continued to focus on strengthening our balance sheet by delivering our backlog, selling inventory aggressively and renegotiating our land positions."

During its fourth quarter, Lennar delivered 14,006 homes, down from 14,403 a year before. New orders were 9,606, down 6% from a year ago. The total value of homes in backlog on Nov. 30 was $4.0 billion, vs. $6.9 billion on Nov. 30, 2005.

Also Tuesday, Lennar said it and partner LNR Property will sell a sizeable stake in their LandSource joint venture for $1.32 billion. Lennar will receive half of that and eventually realize a profit from the sale of $500 million, booking $125 million at closing and deferring the remaining $375 million over future years. Lennar will retain a 19% stake in LandSource, which owns 15,000 acres of land south of Los Angeles.

Lennar plans to report earnings before the market opens Jan. 17.

U.S. markets were closed Tuesday in observance of President Ford¿s funeral. Lennar shares gained 17 cents Friday to close at $52.46.

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