Limping Lennar: Fool by Numbers (LEN)

Limping Lennar: Fool by Numbers

On Sept. 25, homebuilding giant Lennar (NYSE: LEN ) released earnings for the third quarter ended Aug. 31.

The net loss includes a staggering $856.8 million of non-cash write-offs, as unsold homes, land in inventory, and option deposits lose some value every day. These write-offs are a fact of life in the industry, but the year-ago hit was just $76.2 million.
Come one, come all, and marvel at Lennar's incredible shrinking order backlog: $5.6 billion last year, $2.8 billion last quarter, and $2.2 billion today. Amazing!
And you should expect that trend to continue: the 5,800 new orders coming in during the quarter can't match the 7,600 homes completed at the same time.
If you were hoping for some positive regional data that might recommend a more localized homebuilder like Brookfield Homes (NYSE: BHS ) , you're out of luck. Lennar's weakness was spread in a rather uniform layer across the country, region by region.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$2,342	$4,182	(44.0%)
Net Profit	($514)	$207	N/A
EPS	($3.25)	$1.30	N/A
Diluted Shares	158.0	159.2	(0.8%)

Get back to basics with the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Operating Margin	2.5%	11.1%	(8.6)
Net Margin	(21.9%)	4.9%	(26.8)

*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$128	$144	(10.9%)
Total Capital	$7,669	$8,715	(12.0%)

The balance sheet reflects the company's health.

Cash Flow Highlights

The info didn't include a cash flow statement.

Free cash flow is a Fool's best friend.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned, and his home was designed and constructed by a local, privately held homebuilder. Fool rules are here.

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