Lennar Stock Gains After Q1 Results Beats Expectation

Lennar Corporation LEN reported first-quarter FY22 revenue growth of 16.5% year-over-year to $6.20 billion, beating the consensus of $6.08 billion.
Deliveries increased 2% Y/Y to 12,538 homes; New orders increased 1% Y/Y to 15,747 homes; new orders dollar value increased 19% Y/Y to $7.8 billion.
Adjusted EPS was $2.70, above the consensus of $2.60
Lennar’s backlog increased by 24% Y/Y to 27,335 homes; backlog dollar value increased 43% Y/Y to $13.6 billion.
Gross margin on home sales improved 190 bps to 26.9%.
The net margin on home sales improved by 280 bps to 19.4%.
Homebuilding operating earnings increased to $1.1 billion, from $0.8 billion a year ago.
Financial Services operating earnings were $90.8 million, compared to $146.2 million 1Q21; Multifamily operating earnings were $5.4 million, compared to a loss of $0.9 million; and Lennar’s Other operating loss stood at $403.1 million, compared to operating earnings of $471.3 million in 1Q21.
During the quarter, LEN repurchased 5.3 million shares for $526.3 million.
Buyback: Lennar Board approved a new $2 billion stock repurchase authorization.
Lennar had $1.4 billion of Homebuilding cash and cash equivalents and no borrowings under its $2.5 billion revolving credit facility, as of February 28, 2022.
2Q22 Outlook: LEN expects New Orders in the range of 17,800 - 18,200, Deliveries between 16,000 - 16,300, and an Average Sales Price of ~ $470,000.
It expects Gross Margin on Home Sales of 28% - 28.25%, SG&A as a % of Home Sales of 6.8% - 7%, and Financial Services Operating Earnings of $90 million - $100 million.
FY22 Outlook: The company expects Deliveries of about 68,000, Average Sales Price to be between $470,000 - $475,000.
LEN expects FY22 Gross Margin on Home Sales of 27.25% - 28%, S,G&A as a % of Home Sales of 6.6% - 6.8%, and Financial Services Operating Earnings of $440 million - $450 million.
Price Action: LEN shares are trading higher by 1.68% at $90 during the post-market session on Wednesday.

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