By Helen Chernikoff
NEW YORK (Reuters) - Lennar Corp <LEN.N> reporteda higher-than-expected quarterly profit as the No. 3 U.S.homebuilder benefited from orders placed before the homebuyertax credit expired, sending its shares up more than 5 percent.
For the third quarter ended Aug. 31, Lennar posted earningsof $30 million, or 16 cents a share, compared with ayear-earlier loss of $171.6 million, or 97 cents per share.
The results also benefited from a reversal of chargesrelated to the company's use of faulty Chinese drywall, saidFBN Securities analyst Joel Locker.
Lennar's earnings beat analysts' expectations of a profitof 6 cents per share, according to Thomson Reuters I/B/E/S.
Because of confusion over Lennar's tax rate, it was notimmediately clear whether the company's reported earningscompared exactly with analysts' estimates. But even the profitof 12 cents a share, which was adjusted for the tax rate, beatWall Street's expectations.
"The headline number was better than people expected," saidLocker. "That was going to be the bad quarter, with the end ofthe tax credit, so there will probably be a relief rally thatthe numbers weren't that bad."
Revenue rose 14 percent to $825 million, topping WallStreet's expectations of $777.5 million.
But orders fell 15 percent to 2,624 homes due to the April30 expiration of the tax credit in addition to unemployment andforeclosures that present a cheap alternative to new housing,Chief Executive Stuart Miller said in a statement.
The tax credit's expiration has disappointed homebuilders,which earlier this year had seen a rebound in sales that manyhoped reflected improving fundamental demand.
Last week, Beazer Homes USA Inc <BZH.N> cut its full-yearorder outlook after the expiration of the tax credit, sayingpotential buyers remain cautious amid high unemployment andcontinued foreclosures. [ID:nSGE68E0EK]
Shares of Lennar were up 5.1 percent at $14.71 in premarkettrading.
At Friday's close, the shares had lost 36 percent of theirvalue since hitting a 52-week high in April. (Reporting by Helen Chernikoff and A.Ananthalakshmi; Editingby Lisa Von Ahn)