Lennar Tops Expectations
December 18 2015 - 8:20AM
Dow Jones News
Home builder Lennar Corp. logged another quarter of double-digit
percentage gains in new orders, deliveries and net income,
reflecting a sustained recovery in the U.S. new-home market.
The company's earnings and revenue results easily topped
analysts' expectations.
The housing sector has continued to improve, the Federal Reserve
said earlier this week when it raised interest rates for the first
time in about nine years, sentiment that has been underscored by
recent data. The Commerce Department this week reported a surge in
ground-breaking by builders and climbing permits, which are proxy
for future construction, though there are signs that an
increasingly tight labor market in construction is starting to
weigh on builders.
On Friday, Chief Executive Stuart Miller said that improving
employment levels, wage growth and consumer confidence "will keep
the housing market on its slow and steady recovery." Mr. Miller
said Lennar met its delivery schedule despite a tight labor market
and the impact of new regulations.
Miami-based Lennar, the second-largest U.S. home builder by
houses constructed, said deliveries rose 10% for the fiscal fourth
quarter from a year earlier. That rate slowed from 16% in the third
quarter as a collapse in energy prices weighed on demand in
Lennar's Houston market. Deliveries rose 10%, matching the third
quarter's rate, while the average sale price rose 5.5%.
Lennar said it saw higher land costs during the period, a factor
that partially offset the effect of higher home prices and a
decrease in the incentives Lennar offered buyers. Gross profit
margin declined to 24.6% from 25.6% a year earlier, though it
improved sequentially.
Overall, Lennar reported a profit for the three months ended
Nov. 30 of $281.6 million, or $1.21 a share, up from $245.3
million, or $1.07 a share, a year earlier. Revenue grew 14% to
$2.95 billion.
Analysts projected $1.12 in per-share profit on $2.30 billion in
revenue, according to Thomson Reuters.
Shares in the company, up 9.2% this year, were inactive
premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
December 18, 2015 08:05 ET (13:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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