Referencing the off balance sheet and mortgage operations of Lennar, it was a foregone conclusion that they would report a bigger loss than the consensus - which should really make you doubt the credibility of the consensus. The consensus was off by 83% - damn, that's a lot.
I will parse the numbers when I get to see them. I am sure their own mortgage operations hurt them, but I am not so sure they will admit it.
NEW YORK, Sept 25 (Reuters) - U.S. stock futures sagged to session lows on Tuesday after builder Lennar Corp (LEN.N: Quote, Profile, Research) posted results that pointed to further worsening in the housing market just as investors awaited data on August existing homes sales.
Lennar's report of a wider-than-expected quarterly loss hit a market already made jittery by home improvement chain Lowe's Cos. Inc.'s (LOW.N: Quote, Profile, Research) profit warning and day two of the United Auto Workers union strike against General Motors Corp (GM.N: Quote, Profile, Research).
S&P 500 futures (SPc1: Quote, Profile, Research) were down 7.4 points, about even with fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures (DJc1: Quote, Profile, Research) were down 48 points, and Nasdaq 100 (NDc1: Quote, Profile, Research) futures fell 7.8 points.
Which of the big national home-builders have the most to lose from imploding "mortgage operations"?
Posted by: Chuck | September 26, 2007 at 07:45 AM
Lennar had the biggest mortgage operations, $10 billion, but Pulte relied on internally generated morgages for 92% of their sales.
I'll leave it up to you to decide who has the most to lose.
Posted by: Reggie | September 26, 2007 at 10:07 AM