Even though its core business is homebuilding, the problem loan business has been a profitable one for Lennar Corp. in the fourth fiscal quarter of 2010, which ended on Nov. 30.
Its Rialto Investments segment posted operating earnings of $25.1 million (including $12.7 million of net earnings attributable to noncontrolling interests), compared with an operating loss of $1.0 million for the same period one year prior. For the fiscal year, Rialto Investments had operating earnings of $57.3 million (including $33.2 million attributed to noncontrolling interests), vs. a loss of $2.5 million in fiscal 2009.
Revenues for Rialto in the fourth quarter were slightly less than $20 million, consisting primarily of accretable interest income associated with a portfolio of real estate loans acquired in partnership with the Federal Deposit Insurance Corp. Other income was $17.3 million, consisting of gains from the sale of real estate owned and gains upon the foreclosure of REO.
Lennar Financial Services, which includes the homebuilder's mortgage business, had fourth quarter operating earnings of $11.7 million, up from $7.8 million one year prior, as there was higher loan volume and profits per loan.
For the year, Lennar Financial Services had operating earnings of $31.3 million, down from $36 million in fiscal 2009, due to lower mortgage and title operation volume.
Lennar Corp.'s fourth quarter earnings were $32 million for the fourth quarter down from $35.6 million for the same period in 2009. In fiscal 2010, Lennar had a profit of $95.3 million, much improved over a $417 million loss for fiscal 2009.
