Homebuilder Lennar's profit beats on higher home sales, prices
Lennar, the No.2 U.S. homebuilder, reported a higher-than-expected quarterly profit on Tuesday as it sold more homes at higher prices.
The shares of the company were up 2.7 percent at $54.25 in light premarket trading.
Home orders, a key indicator of future revenue, rose 8.4 percent to 7,610 homes in the third quarter ended Aug. 31.
Lennar said deliveries of about 950 homes will be pushed into fiscal 2018 due to the recent hurricanes.
The homebuilder's affected communities in Texas, Florida, Georgia and South Carolina accounted for about 40 percent of annual homebuilding revenue, Lennar said last month.
"Once we get past the short-term impact from the storms, there will be increased economic activity and an increased demand for new homes," Chief Executive Stuart Miller said.
The Florida-based builder said it sold 7,598 homes during the quarter, compared with 6,779 homes a year earlier. The average selling price rose 3.6 percent to $375,000.
Last month, bigger rival D.R. Horton Inc drastically cut its 2017 forecast for cash flow from operations, citing delays caused by the recent hurricanes.
While demand for housing in the United States remains robust, there is an acute shortage of homes for sale, partly due to labor scarcity.
Hurricanes Harvey and Irma are likely to worsen the housing shortage as scarce labor is pulled toward the rebuilding effort and materials are bid higher.
Net income attributable to Lennar shareholders rose to $249.2 million, or $1.06 per share, in the quarter, from $235.8 million, or $1.01 per share, a year earlier.
The company's revenue rose 15.1 percent to $3.26 billion.
Analysts on an average had expected the company to earn $1.01 per share on revenue of $3.24 billion, according to Thomson Reuters I/B/E/S.
Up to Monday's close, Lennar's shares had risen 23 percent this year.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Arun Koyyur)