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See Lennar, Voodoo and Zombies fully consolidated and Lennar Insolvent: Enron redux??? , then read the press release below... 

UPDATE: Lennar Posts Record Loss In FY4Q On Land Losses January 24, 2008: 07:45 AM EST


Lennar Corp.'s (LEN) fiscal fourth-quarter net loss ballooned, breaking a quarter-old record for the company, as the company took a $1.2 billion loss on land sales. Near-term conditions may continue to decline.

For the quarter ended Nov. 30, the Miami builder reported net loss of $1.25 billion, or $7.92 a share, compared with a year-earlier net loss of $195.6 million, or $1.24 a share. Lennar posted a fiscal third-quarter net loss of $ 513.9 million, a then-record for the 53-year-old company.

The land loss consists of $970.1 million in valuation adjustments. Lennar, the nation's second-largest home builder, stunned investors in November when it announced a "strategic land investment venture" with Morgan Stanley Real Estate, selling about 11,000 home sites in 32 communities, including raw land and partially developed sites for $525 million - nearly 60% below the $1.3 billion book value.

Lennar also wrote off $217.6 million of deposits and pre-acquisition costs in the latest quarter on 12,500 home sites under option that Lennar doesn't intend to purchase. Year-earlier items included $119.9 million in land losses and $ 111.1 million in write-offs.

Revenue dropped 49% to $2.18 billion.

The mean estimates of analysts surveyed by Thomson Financial were for a loss of $1.65 a share on revenue of $2.06 billion.

Shares traded at $15 in premarket activity Thursday, compared with Wednesday's close of $14.94.

President and Chief Executive Stuart Miller said, "While we are hopeful that recent interest-rate moves by the Federal Reserve and recent plans proffered by the federal government will have a stabilizing impact on the housing market, market conditions remained depressed and, in fact, continued a downward slide through the end of our fourth quarter."

Lennar's new home orders fell 51% to 4,761, while deliveries, excluding unconsolidated entities, dropped 49% to 6,810. The average sales price fell 3.7% to $291,000.

Gross margins on home sales, excluding valuation adjustments, fell to 12.1% from 14.4%.

Miller said, "As we look ahead to 2008, we are not expecting market conditions to improve, and perhaps might continue to decline in the near term. Nevertheless, the strength of our balance sheet, bolstered by the cash generated through our fourth-quarter strategic moves, will keep us well positioned to weather these turbulent times."

Ground zero of the credit crunch - the housing market - has yet to register anything close to a recovery. Builders continue to cut inventory prices and many new homes are now cheaper than existing homes. But with some consumers unable to secure funding - and others worried about deteriorating value - traffic has slowed to a trickle and cancellation rates remain high.