Lennar’s profit and revenue slumped in the fiscal third quarter on lower home prices, but still topped analysts’ estimates. Here’s what you need to know:
NET INCOME: The homebuilder posted a profit of $1.11 billion, or $3.87 a share, compared with a profit of $1.47 billion, or $5.03 a share, a year earlier. Analysts polled by FactSet expected earnings of $3.53 a share.
REVENUE: Revenue declined to $8.73 billion from $8.93 billion a year earlier, but beat the $8.49 billion expected by analysts polled by FactSet.
ADJUSTED EARNINGS: Lennar posted earnings of $3.91 a share after adjusting for certain one-time items. Analysts polled by FactSet projected adjusted per-share earnings of $3.52.
WHAT WE WATCHED
DEMAND: Co-Chief Executive Stuart Miller said that rising interest rates were continuing to aid homebuilders. A housing supply shortage, which is being absorbed by strong primary and pent-up demand, is still a key feature of the current strong sales environment.
More expensive mortgages have made homeowners more reluctant to sell, thus boosting demand for new homes.
AVERAGE PRICE: Revenues were brought down in the quarter by lower home prices. Average sales price of deliveries sank 9%, which the company primarily attributed to market conditions.
OUTLOOK: Lennar forecast fourth-quarter sales prices to be consistent with the third quarter. The company expects deliveries of 21,500 to 22,500, compared with the 20,389 forecast by analysts, and new orders of 16,200 to 17,200, compared with analysts’ estimates of 16,239.