Lennar's sales numbers were disappointing and aren't expected to improve for the rest of the year, company executives said during a Thursday morning call with analysts. The company logged a 76-cent-per-share loss ($120.9 million) for its fiscal second quarter, well above the average $0.55 that analysts were predicting. CEO Stuart Miller said a recession may be in the offing.

Despite all that, and perhaps because good news these days in the home building realm is relative, the company's call sounded some upbeat notes.

--The company has about $880 million of cash on hand and no debt on its credit facility.

--It has reduced its exposure to potential joint venture problems by decreasing its JV deals from 270 to 163 and its recourse debt in the ventures by about $1 billion, more than 50% since its peak in '06.

--While Sales and General Administrative expenses climbed a bit from the first quarter to the second, to 15.4%, Miller said the company is committed to lowering that number to 10% by year's end.

--Land valuation adjustments and write-downs and write-offs at $137 million were less than were expected but still amounted to about 60-cents-a-share of the total loss.

--The company reduced its unsold completed home inventory by 47% in the quarter and 70% year-over-year. Now the company is averaging one completed unsold home per community.

"There is a silver lining in this," said Miller. "The positive news in the field is that inventory of finished homes is coming down.... The number of open communities is declining and the number of (competing) builders is declining."

Miller took time to address the question about what affect the bankruptcy of its LandSource joint venture, in which it holds a 16% stake, will have on the company.

"As it relates to Lennar, one should recall that the $1.3 billion in investment has no recourse.... The impact to the company is immaterial."

Miller also made note of the company's initiative to focus its division management away from asset management and onto manufacturing management. "Our divisions are focused on becoming real manufacturing machines," he said.

They are also sharpening their sales skills, especially through Internet marketing,

"Division presidents are personally immersing themselves in our Internet sales," Miller said. "Our Interent sales team is like a Realtor, with the ability to cross sell.... We have tripled on the Internet sales front"

Lennar has also concentrated on redesigning its products to be smaller, simpler and thus less costly. The company has, in some cases, reduced costs by as much as 20%, he said.

"Both at the local regional and corporate levels, we are finding ways through unit cost pricing to bring down construction costs at an accelerated rate," he said.

And the shrinking and simplification of plans has helped reduce cost as well. "We have fewer plans," said Miller. "And we took a fresh look at scaling back features...This proposition is based on pure value...to be able to compete head-to-head with our toughest competitor--foreclosure sales."