Lennar Earnings Beat Estimates as Peak Buying Time BeginsJohn Gittelsohn
Lennar Corp., the second-largest U.S. homebuilder by revenue, reported fiscal first-quarter earnings that beat estimates as the year’s busiest buying period gets under way.
Net income for the three months through February climbed to $115 million, or 50 cents a share, from $78.1 million, or 35 cents, a year earlier, the Miami-based company said in a statement Thursday. Earnings were expected to be 45 cents a share, the average of 18 analyst estimates compiled by Bloomberg. New orders climbed 18 percent.
U.S. builders have been expecting sales to improve as the economy strengthens and historically low mortgage rates help make homebuying more affordable. Orders for new houses usually rise in the first several months of the year as families try to time their moves for school vacations that stretch from June through August.
“Early signals from this year’s spring selling season indicate that the housing market is improving, and disappointing single-family starts and permits numbers should rebound shortly,” Chief Executive Officer Stuart Miller said in the statement.
New orders rose to 5,287 from 4,465 a year earlier, with the dollar value for those orders climbing 25 percent to $1.83 billion, the company said. The average sales price of those homes rose 5.8 percent to $346,000 compared with $327,000 a year ago.
Lennar’s revenue for the fiscal first quarter rose 21 percent to $1.64 billion, according to Thursday’s statement. The gross margin on home sales was 23.1 percent, compared with 25.1 percent a year earlier. The decline was primarily caused by an increase in land, material and labor costs.
Lennar builds homes for first-time and move-up buyers, retirees and multiple-generation households in 17 states. It also invests in apartments, master-planned communities, mortgage financing and commercial real estate. This month it opened its first community of single-family rental homes, in Sparks, Nevada.
Earnings were announced before the start of regular U.S. trading. Lennar shares gained 1.8 percent to $49.72 yesterday. They’re up 11 percent this year, compared with a 3.6 percent increase for the 22-company Bloomberg index of homebuilders.