11:00AM New York - Lennar Corporation reports second quarter revenue decline of 61% and net loss narrowed on fewer home sales and at lower prices.

Lennar Corporation based in Miami, Florida reported a sharp decline in revenue and home sales but loss in the second quarter declined. The company sees no immediate signs of recovery in the near future as it battles to take charges on options on home building sites that it has no plans to acquire or build on.

Second Quarter Revenue Plunges 61%

Lennar Corporation plc, the second largest homebuilder reported today second quarter revenue declined 61% to $1.05 billion from $2.74 billion the year before, as home deliveries fell, and the builder took heavy charges.

Deliveries of homes fell 60% to 3,830 in the quarter to May 31 from 9,568 in the quarter a year ago. New orders declined 45% to 4,396 from 8,056 and the cancellation rate was 22%. The value of Lennar’s backlog sank 56% to $1.25 billion or 3,958 homes in the fist six months from 8,199 a year ago.

Lennar said it reduced unsold completed homes inventory by 70% in the second quarter compared to a year ago and 47% compared to first quarter of this year. On average, the company has less than one completed unsold home per community.

Revenues from home sales decreased 62% and the financial services unit posted a quarterly operating loss of $3 million. Revenues in the quarter declined as deliveries fell 58% and new home prices declined 8% from a year ago.

U.S. new home sales have been on a decline for the last thirteen months and the latest data from the Commerce Department showed new home sales at 512,000 units in May, lowest in thirteen years. Inventories of unsold homes are near record high and at the current level of demand it may take more than a year to absorb all the unsold homes in the market.

The average sales price of homes delivered decreased to $274,000 in the second quarter from $298,000 in the same period last year, due to reduced pricing and higher sales incentives offered to homebuyers.

For the six months to May, home builder generated revenue of $2.04 billion compared to $5.4 billion a year earlier.

Second Quarter Losses Declines

Lennar Corp said that quarterly losses narrowed to $120.9 million or 76 cents per share from $244.2 million or $1.55 per share the year before.

In May, D.R Horton Inc, the largest homebuilder reported a quarterly loss of $1.3 billion after writing down the value of its land and unsold inventory.

In the quarter, selling, general and administrative expenses fell by $238.9 million or 60%. Gross margin on home sales rose to 15%, up 230 basis points and operating margin gained to 0.5%.

At the end of the second quarter, Lennar Corp had $880 million in cash and slashed joint venture debt by $1 billion or 50%.

For the six months, the company loss widened to $209.1 million or $1.32 per share compared with $175.6 million or $1.12 per share same period in 2007.

Segment Analysis

New home deliveries, excluding unconsolidated entities, decreased to 3,729 homes from 8,940 homes last year. Gross margin were $162 million compared to $364.8 million in 2007. New home deliveries, excluding unconsolidated entities, decreased to 7,166 homes in the six months ended May 31, 2008 from 17,506 homes last year. The average sales price of homes delivered decreased to $276,000 in the six months ended May 31, 2008 from $300,000 in 2007.

Selling, general and administrative expenses fell $238.9 million or 60%, in the second quarter. As a percentage of revenues from home sales, SG&A expenses increased to 15.4% in the quarter from 14.7% in 2007. The company has targeted to lower the annual selling and general expenses to 10% by the end of the fiscal year.