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alstry (< 20)

Analysts smoking Lennar #5



March 27, 2008 – Comments (2)

LEN end this quarter with about $1.15 Billion in backlog.  Last year Q1 ending backlog was $3.45 Billion.  Backlog was down a whopping 67%.  Another way to look at it is this years backlog is less than 1/3 of what it was last year.  ONE THIRD!!!!!!!!!!!!!!!!!!!!!!!!!!!

Last year, LEN converted about 80% of its Q1 backlog into revenues in the second quarter.  It accomplished that in a better selling environment and higher spec count(more units to liquidate).

If we simply took that same ratio and applied it to LEN's current backlog, you would think a reasonably optimistic revenue estimate for Q2 would be about $900 million.  That would actually be extraordinary considering the current slower selling environment, a more realistic estimate would probably come in closer to $750 million.

But not to let us down, current consensus revenue estimate for Q2 is $1.46 Billion in revenues.  Almost $300 million MORE than ending backlog or about 25% higher than TOTAL backlog and 100% higher than the current selling environment indicates.

What are the analysts smoking?????

2 Comments – Post Your Own

#1) On March 27, 2008 at 9:59 AM, Energypartners (96.64) wrote:

LEN results beat the expectation. Est. loss of -1.07, and LEN had actual loss of -.56. Also the inventory adjustments were only 107M, much lower than my expectations. Comment from report:

With most of the significant work on asset impairment behind us....

This sounds like LEN putting a line in the sand - the NAV, and book value will not be reduced much the rest of 2008.


LEN is still my best HB red thumb, with backlog down 70%. In my real portfolio, I will not short any HB stock as I still think the US will continue to propose bailouts. We will see the US buy a large chunk of CMO, CDO debt in 2008.

On a side note, I sold the last of my SPF calls at huge profits, and have red thumbed SPF on CAPS. I think the firing of Steve is a sign that Q1 was not going very well..... 

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#2) On March 27, 2008 at 10:40 AM, alstry (< 20) wrote:

The fact that you are still playing with financial accounting numbers in a cash flow world demonstrates clearly that you still don't have a grasp of the may want to confirm this with FloridaBuilder.

As far as your bailout scenario, it really doesn't matter.  The fed can buy all the bad debt it guess is about $10 Trillion. 

Until we figure out a way to get more money to individuals and businesses to meet their monthly expenses, the economy will shrivel into a raisin by the end of the summer.  You can keep cutting cancer out of the body all you want, until you can abate its growth, pretty soon you end up cutting out every vital organ.

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