Lennar Capitalizes on Housing Rebound as 3Q Profits Jump 39%
Despite concerns about rising interest rates, home builder Lennar (NYSE:LEN) beat the Street on Tuesday with a 39% leap in third-quarter profits as deliveries and orders jumped double-digits.
Shares of the No. 3 U.S. home builder advanced about 1% on the stronger-than-expected results.
Lennar said it earned $120.7 million, or 54 cents a share, last quarter, compared with a profit of $87.1 million, or 40 cents a share, a year earlier.
Last quarter’s results included a tax provision of $67.2 million. Analysts had been calling for EPS of 45 cents.
Revenue soared 46% to $1.6 billion, topping the Street’s view of $1.56 billion. Gross margins expanded to 24.9% from 23.2%.
New orders, a closely-watched metric of future activity, increased 14% to 4,785 homes, which is below projections from analysts for 5,244. New order dollar value jumped 32% to $1.5 billion.
Miami-based Lennar said its deliveries rose 37% last quarter to 4,990 homes, exceeding forecasts for 4,815. The company’s backlog increased 32% to 5,958 units.
"We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multi-family homes built over the last five years,” Lennar CEO Stuart Miller said in a statement. “While there may be bumps along the road that may impact the short-term pace of the recovery, the long-term outlook for our business remains extremely bright."
Shares of Lennar gained 1.22% to $34.96 ahead of Tuesday’s opening bell, putting them on track to trim their 2013 slump of 10.7%.