Miami-based Lennar Homes reported the results of a depressed first quarter early this morning (March 27), with revenues of $2.8 billion, down 14%, and net earnings of $68.6 million, or $0.43 per diluted share, a 73.4% drop from the $258.1 million posted during the first quarter of 2006.

The net earnings include a $175.9 million pretax gain on a transaction involving its LandSource joint venture and a $91.6 million pretax charge related to valuation adjustments and write-offs of option deposits and pre- acquisition costs. Home building debt to total capital improved to 30.9% from 36.0% (net home building debt to total capital of 28.6%)

Home building operating earnings were down 69% to $140.0 million and financial services operating earnings were $15.9 million, up $5.2 million. Home building debt to total capital improved to 30.9% from 36.0% (net homebuilding debt to total capital of 28.6%), and new orders were down 27% to 7,132 homes. The company reported a cancellation rate of 29%.

Revenue from home sales decreased 10% in the first quarter of 2007 to $2.6 billion from $2.9 billion in 2006. Revenues were lower primarily due to a 4% decrease in the number of home deliveries and a 7% decrease in the average sales price of homes delivered in 2007. New home deliveries, excluding unconsolidated entities, decreased to 8,566 homes in the first quarter of 2007 from 8,904 homes last year. The biggest decreases, the company said, came in its Central and West divisions.

The average sales price of homes delivered decreased to $303,000 in the first quarter of 2007 from $326,000 in the same period last year, primarily due to higher sales incentives offered to homebuyers ($45,500 per home delivered in the first quarter of 2007, compared to $13,800 per home delivered in the same period last year).

Stuart Miller, Lennar's president and CEO, said, "The housing market continues to demonstrate overall weakness. While some markets are performing better than others, the typically stronger spring selling season has not yet materialized. These soft market conditions have been exacerbated by the well-publicized problems in the subprime lending market." SEE COMPANY STATEMENT HERE

Miller also stated that the company does "not expect to achieve our previously stated 2007 earnings goal, and we are not comfortable providing a new earnings goal at this time."