Lennar posts surprise first-quarter profit

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Even as new U.S. home sales plunged to a record low in February, home builder Lennar Corp. posted an unexpected profit for the three months that ended Feb. 28 thanks to cost-cutting measures and investments in distressed real estate assets, the Miami-based company said this morning. Lennar’s net income for the first quarter of $27.4 million, or 14 cents per share, well above analysts’ predictions of a loss of 7 cents per share. Analysts told Bloomberg News that the boost came largely from its Rialto Capital subsidiary, which was launched in 2007 to focus on distressed properties and loan workouts and was responsible for $11 million in operating income during the first quarter. It’s the fourth consecutive profitable quarter for Lennar, which lost $6.5 million, or 4 cents per share, during the first quarter of 2010 but was nonetheless the second-most profitable home builder in the country last year. Meanwhile, as the Commerce Department said last week, sales of new U.S. homes took a 16.9 percent tumble in February to an annual pace of 250,000 — a record low — though the nosedive didn’t seem to be affecting home builder stocks. [Bloomberg]