Lennar Posts Quarterly Profit, Expects $320M Tax Refund
Miami-based homebuilder Lennar (LEN) reported net earnings of $35.6m, $0.19 per share, for its fiscal year fourth quarter that ended Nov. 30 and said it will receive a tax refund of $320m as a result of legislation that temporarily allowed companies to recoup losses from taxes paid in profitable years. The profitable quarter compares to a net loss of $811m, or $5.12 per share in fiscal Q408. It’s a bright spot in a fiscal year when Lennar’s revenue was $3.1bn, down 32% from a year ago and the company reported a $2.45 per share net loss for the fiscal year. For the fiscal year, Lennar said it delivered 11,478 homes (down 27% FY08), had 11,510 new orders (down 14% from FY08) and a cancellation rate of 18%, compared to a rate of 26% in the previous year. However, in Q409, Lennar said it experienced its first year-over-year increase in new orders since its fiscal year Q106. “During the fourth quarter, the overall housing market continued to move towards stabilization as more confident homebuyers took advantage of increased affordability and the $8,000 federal tax credit,” said Lennar president and CEO Stuart Miller. While homebuilders look to continue to benefit from the homebuyer tax credit since its extension into the spring of 2010, Lennar said it will benefit from another provision included in that legislation. As HousingWire previously reported, the legislation that extended the tax credit also includes a provision for business to recoup certain losses through a tax refund. The provision, called a net operating loss (NOL) carryback, allows a firm to get a tax refund from a profitable year when it experiences in a loss in a later year. Normally, NOL carryback claims are limited to two years, but the Worker, Homeownership and Business Act of 2009 temporarily extended that to five years. Lennar said it will gain a $320m tax refund from the provision. Additionally, Beazer Homes (BZH) announced Thursday it would increase its previously announced stock offering to 19.5m shares and priced the offering at $4.60 per share. The offering runs concurrent to a $50m offering of convertible subordinate debt. Beazer announced the notes would convert to shares of the company’s common stock at a minimum rate of 4.4547 shares per $25 principal amount of notes and a maximum rate of 5.4348 shares per $25 principal amount, depending on the applicable market value of the company’s common stock. Write to Austin Kilgore.