Lennar Corp. (NYSE: LEN) said on Tuesday that fiscal second quarter net income fell by 70% as the company had unfavorable comparables (more tax gains in the year earlier quarter); however shares climbed as both revenue and earnings exceeded street’s estimate. Strong growth in new orders and increase in home prices boosted the top line growth.
The homebuilder has been consistently posting double digit revenue growth in recent quarters as gradually improving U.S. macroeconomic environment, higher rents and cheap and easily available home financing have boosted the demand for new homes.
Commenting over the results and improving U.S. housing market, Lennar Chief Executive Stuart Miller said to analysts in a conference call on Tuesday, “ (better-than-expected results) continue to point towards a solid housing recovery,” adding that demand outpaced the supply. The CEO said that the Company was aggressively purchasing more land although the supply is limited.
For the fiscal second quarter ended May 31, Lennar Corp reported net income of $137.4 million or 61 cents a share compared to a profit of $452.7 million or $2.06, in the year-earlier quarter.
In the recently concluded quarter, 18 cents were included in earnings towards partial reversal of deferred tax asset valuation compared to $1.85 a share, in the same quarter of last year.
On adjusted basis, Lennar earned 43 cents a share.
Revenue soared 53% to $1.43 billion.
Analysts surveyed by Thomson Reuters had most recently forecasted for earnings of 33 cents a share on revenue of $1.33 billion.
Gross margin widened to 24.1% from 22.5% in the same quarter of last year.
Home deliveries jumped 39% to 4,464 units, cancellations rose 14% while the average selling price climbed 13% to $283,000.
New orders soared 27% to 5,705 homes while backlog, a key gauge for future business surged 55% to 6,163 homes.
Selling, administrative and general expenses narrowed to 10.9% from 13.2%. The Company said that these expenses fell below 11% for the first time since the third quarter of 2006.
Just last month, Lennar’s rival, Toll Brothers (NYSE: TOL) also reported better-than-expected fiscal second quarter results. The luxury homebuilder, at that moment said that higher orders and selling prices boosted its bottom line.
Recent Comments