Lennar Beats Q3 Expectations

Lennar Corporation LEN reported stronger-than-expected results for its fiscal third quarter on Monday. The Miami, Florida-based company reported a quarterly profit of $223 million, or $0.96 per share, versus a year-ago profit of $177.8 million, or $0.78 per share. Its revenue rose 24 percent to $2.49 billion. However, analysts were expecting earnings of $0.79 per share on revenue of $2.42 billion. The average estimate among 15 Estimize users was for earnings of $0.82 per share and revenue of $2.51 billion. Deliveries rose 16 percent to 6,318 homes during the quarter, while the value of new orders surged 20 percent to $2.3 billion. The average sale price of homes delivered increased 5 percent to $350,000 in the quarter. Gross margin on home sales shrank to 24.1 percent from 25.2 percent. New orders rose 10 percent to 6,495 homes. Operating earnings for the Lennar Financial Services segment rose to $39.4 million in the third quarter, versus $27.1 million in the year-ago quarter. Operating earnings for the Rialto segment declined to $9.0 million from $12.4 million. Operating loss for the Lennar Multifamily segment came in at $3.0 million in the third quarter, versus operating earnings of $8.5 million in the year-ago quarter. Stuart Miller, Chief Executive Officer of Lennar Corporation, said, "During the third quarter, the housing market continued to improve in its slow and steady manner, as demonstrated in the past few years. The new home and rental markets continued to have significant pent-up demand, which positions us well for years to come. This demand is driven primarily by a large production deficit built up over the last several years, an increasing millennial population, reasonable affordability levels and high-rental occupancy rates." Lennar shares fell 2.30 percent to close at $51.76 yesterday.