LENNAR POSTS BIG GAIN NEWHALL LAND OWNER CREDITS NEW-HOME DEMAND FOR 34% JUMP IN QUARTER.

Byline: Staff and Wire Services

Newhall Land owner Lennar Corp., one of the nation's largest home builders, posted a 34 percent jump in profits Wednesday for its latest quarter as demand for new homes remained strong.

The Miami-based firm behind the planned Newhall Ranch and fast-developing Stevenson Ranch also raised its earnings estimate for the current fiscal year.

For the fourth quarter ended Nov. 30, Lennar had net income of $379.7 million, or $2.29 a share, compared with $283.2 million, or $1.69 a share, a year earlier.

Analysts had on average expected earnings of $2.21 a share, according to Thomson First Call. Shares of Lennar closed Wednesday at $56.35, up $5.52, or 10.86 percent, on the New York Stock Exchange.

Lennar and offshoot LNR Properties bought a 50 percent stake in The Newhall Land and Farming Company for $990 million last year. LNR, a commercial property developer, sold in September for $2 million in a pending deal with Riley Property Holdings LLC, a group of New York-based investors.

Lennar officials have said the Newhall Land acquisition won't affect the company's bottom line until 2006.

Lennar revenue rose 21 percent, to $3.55 billion from $2.94 billion. Home building, including sales of homes and land, generated revenue of $3.41 billion, up 22 percent from a year earlier, the company said.

Home sales rose 26 percent, to $3.36 billion, on a 12 percent increase in the number of homes delivered and a 13 percent rise in their average sales price. Lennar delivered 11,716 new homes in the quarter with an average sales price of $287,000.

The gross margin of profit on home sales improved to 25.6 percent of sales from 23.7 percent a year earlier. Lennar attributed the improvement to its pricing power, particularly in markets where land is tight, and a shift to higher-margin houses.

``Our home building operations benefited substantially from our pricing power in land-constrained markets,'' Stuart Miller, Lennar's president and chief executive officer said in a statement. ``Controlling an increasing number of homesites in such markets remains a significant competitive advantage for us.''

For the full fiscal year, net income rose 26 percent, to $945.6 million, or $5.70 a share, from $751.4 million, or $4.65 a share, in fiscal 2003.

Full-year revenue climbed 18 percent, to $10.5 billion from $8.91 billion.

Lennar raised its goal for fiscal 2005 earnings to $6.90 a share from its previous target of $6.60 a share. It cited its order backlog of $5.06 billion for the improved view.

``We have excellent visibility as we enter 2005 and we expect our company to have another record year,'' Miller said in the statement.

Newhall Land spokeswoman Marlee Lauffer said the company plans to complete the Belcaro, Creekside and Westridge developments in 2005, and win final approval for two other projects. Construction of the 1,128-home Riverpark in Saugus and the 2,500-home Westcreek in Valencia could begin in 2006, she said.

``We're in various stages of entitlements for future Newhall communities,'' she said. ``We will not have many new communities next year.''

The city Planning Commission will consider Riverpark next week before forwarding it to the Santa Clarita City Council for a January hearing, Lauffer said. Building is slated for 2007.

Westcreek, which hit a snag earlier this year when the Western spadefoot toad was discovered on the 996-acre property, has been revised and would be considered by the county Board of Supervisors early next year, she said.

Meantime, the Valencia builder is compiling plans for the 21,000-home Newhall Ranch project in the hills west of the Golden State Freeway, though building likely won't begin until 2008, Lauffer said.

``We're actively pursuing various neighborhoods in Newhall Ranch,'' she said. ``We're doing the tentative tract map.''

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Lennar credits sales of new homes, such as these in Santa Clarita, for its jump in profits.

David Crane/Staff Photographer