Lennar Corp., Miami, (NYSE:LEN, LEN.B) before market open Thursday reported a net profit of $35.6 million ($0.19 per diluted share) for its fiscal fourth quarter ended Nov. 30. The profit was due largely to a $351.8 million reversal of charges to deferred tax assets made possible by a net-operating-loss carryback.

The results, which beat handily the consensus analyst estimate of a loss of 48 cents a share, compare to a net loss of $811.0 million, or $5.12 per diluted share, in the fiscal fourth quarter of 2008. The results included $1.34 per share related to the reduction of the deferred tax asset valuation allowance offset by a $0.58 per share charge related to valuation adjustments and other write-offs and a $0.31 per share charge related to valuation adjustments to land Lennar intends to sell or has sold. However, minus the tax benefit, the company would have reported a loss of $1.15 per share.

Shares of Lennar were up nearly 7% at $14.65 on heavy volume in early trading Thursday. Carl Reichardt, home building analyst at Wells Fargo Securities, put out a research note questioning the move in the stock. "This quarter is not as good as the stock action indicates in our judgment," he wrote."LEN's headline EPS number was positive solely due a $320MM expected tax refund. While gross margin was better than we anticipated, SG&A, corporate expense, and interest were higher and LEN was not profitable on a pre-impairment operating basis."

For the fiscal year, the net loss was $417.1 million (-$2.45 per diluted share), compared to a net loss of $1,109.1 million (-$7.00 per dilutedshare) in 2008. The annual loss included a $1.73-per-share charge related to valuation adjustments and other write-offs and a $0.35 per share charge related to valuation adjustments to land the Company intends to sell or has sold to third parties, offset by $0.48 earnings per share related to the reduction of the deferred tax asset valuation allowance primarily due to the NOL carryback.

For the fiscal fourth quarter, revenue overall, including joint ventures, was down 29% from the 2008 quarter to $913.7 million. Revenues from home sales decreased 30% to $830.2 million, primarily due to a 22% decrease in the number of home deliveries to 3,488, excluding unconsolidated entities, and a 9% decrease in the average sales price to $238,000. Sales incentives decreased to $36,300 per home from $51,400 in the same period last year and from $42,200 in the prior quarter. Including joint ventures, deliveries were down 23% to 3,496 from last year's fiscal fourth quarter and up 30% from the fiscal third quarter.

New orders rose 3% to 2,652 of which only 10 homes were attributed to joint ventures. Dollar value of new orders rose 12% to $669.8 million, with only$7.5 million coming from unconsolidated ventures. The cancellation rate fell to 20% from 32% in the comparable 2008 quarter.

Backlog increased 0.2% to 1,631, with 9 homes coming from unconsolidated ventures, and dollar value of homes in backlog rose 5% to $479.6 million, with $7.2 million attributable to joint ventures.

For the fiscal year, Lennar reported deliveries of 11,478 homes, down 27% from fiscal 2008 and new orders of 11,510 homes, down 14% from the prior year. The cancellation rate for the year was 18% compared to 26% the year before.

Gross margin on home sales for the quarter was 17.8% excluding valuation adjustments of $55.5 million, 11.1% including the charges. SG&A was 19% or total revenue, down $32.2 million from the same period last year, primarily due to reductions in headcount, selling expense and fixed costs.SG&A was 16.2% of home sales revenue, and increase of 210 basis points from 14.1% in the comparable quarter in 2008.

Losses on land sales totaled $161.3 million for the quarter, and equity in loss from unconsolidated entities was $25.8 million.

Operating earnings for the financial services segment was $7.8 million in the fourth quarter of 2009, compared to an operating loss of $5.4 million in the same period last year, primarily due to cost reduction initiatives implemented throughout the downturn.

Lennar ended the quarter, and the fiscal year, with home building cash of$1.3 billion and no outstanding borrowings under its credit facility. Home building debt to total capital, net of cash, was 36.9%. Maximum recourse indebtedness related to JVs was $287.7 million, down $92.6 million from the fiscal third quarter.

At the close of the fiscal year on Nov. 30, Lennar had issued 21.0 million shares of its Class A common stock under an equity draw-down program for gross proceeds of $225.5 million. The company is authorized to sell shares for up to $275 million under the equity draw-down program. The company also expects a $320 million tax refund early this year.

"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 Stuart Miller, president and CEO in a statement. "While we continue to adapt our business in light of the current economic landscape and its challenges, we are optimistic that homebuyers have recognized that the residential housing market is improving and will continue to take advantage of the extended housing stimulus."

He added, ""We continued to focus on the basics of our homebuilding operations, as we strategically position our company to return to profitability in 2010."