We will get a little better idea of just what is happening with the real estate market tomorrow when home builder Lennar Corporation (NYSE: LEN) reports its second quarter results.Headed into tomorrow's earnings announcement, analysts are expecting another loss, but a much smaller loss than the company reported for its first quarter. Last quarter we saw a loss of 98 cents per share. This quarter analysts are predicting a loss of "only" 63 cents per share.
The troubled real estate market has been a major contributor to the current recession that America is dealing with, but there have been some signs lately that things are starting to move in the right direction. Just today, the Federal Reserve noted that the recession is easing, but also warned that the economy is going to continue to remain weak.
Lennar is the nations fourth largest home builder, and has been trying creative marketing to combat the drop in demand. Its attempts to lure in unsure buyers include tactics such as no closing costs, no money down purchases, and some of the lowest interest rates in the industry. Whether or not these aggressive tactics were enough to pull in buyers remains to be seen.
Analyst Opinion: In a recent report, S&P maintained its hold rating on the stock. S&P sees "sales negatively impacted by contract cancellations and reduced orders, thereby lowering its backlog contract value."
Traders will definitely be watching Lennar closely, but the earnings report could get overshadowed by finalized first quarter GDP numbers, and jobless claims data, both of which are due out tomorrow as well.
What are your predictions for Lennar? Should we expect to see better than expected numbers, or brace ourselves for more trouble for the home builder?
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