Profit falls 31% for Lennar, while new home orders rise
Homebuilder Lennar Corp. (LEN) posted a $20.7 million profit , or 11 cents per share, during the third quarter, down 31% from $30 million, or 16 cents per share, in the year-ago period, but the quarter had a silver lining with an increase in new home orders. Lennar said its third quarter is the sixth consecutive quarter to record a profit. During the period, the company's gross margin on home sales stood at 21.1%, while its cancellation rate hit 20%. The company's backlog of homes rose to 2,519 residences, up 16% from a year ago, while deliveries dropped 3% from last year to 2,865 homes. New orders grew 11% from the year-ago quarter to 2,914 homes. CEO Stuart Miller said he noticed encouraging signs with demand for home purchases slowly returning to the market as home prices and interest rates remain at all-time lows. Still, Stuart noted that "demand is tight and tightening lending standards, high unemployment and low overall consumer confidence" are weighing down home sales. At the end of 3Q, Miami-based Lennar Corp. had $800.3 million in cash on hand, while its debt to capital ratio hit 46.6%. The company's stock rose almost 3% Monday morning, trading at $14.34 per share. Write to: Kerri Panchuk.