By
Anders Bylund
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September 25, 2007
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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
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Q3 2007
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Q3 2006
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Change
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Sales
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$2,342
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$4,182
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(44.0%)
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Net Profit
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($514)
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$207
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N/A
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EPS
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($3.25)
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$1.30
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N/A
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Diluted Shares
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158.0
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159.2
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(0.8%)
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Get back to basics with the income statement.
Margin Checkup
*Expressed in percentage points
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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Q3 2007
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Q3 2006
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Change
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Cash + ST Invest.
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$128
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$144
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(10.9%)
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Total Capital
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$7,669
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$8,715
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(12.0%)
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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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