1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Mayank Marwah
Mayank Marwah
Articles (704) 

Lennar’s 2nd-Quarter Earnings Rise on Improving Home Market

Company post better-than-expected earnings

June 25, 2019 | About:

Lennar Corp. (NYSE:LEN) released its second-quarter earnings on June 25 before market opened. The homebuilder registered better-than-expected earnings due to lower interest rates for mortgages as well as moderation in house prices.

Snapshot of the quarter

The Miami-based company recorded net earnings of $421.5 million or $1.30 per diluted share in the second quarter of the year, up from $310.3 million or 94 cents per diluted share reported in the year-ago quarter. Revenue stood at $5.6 billion, reflecting 2% year-over-year growth. At the end of the quarter, the company had cash and cash equivalents of $801 million. 

Stuart Miller, executive chairman of Lennar, said: "Our second quarter results benefited from both first quarter deliveries postponed by weather as well as a recovering housing market. The well-documented market pause in the second half of 2018 set the stage for more moderate home price increases and lower interest rates which stimulated both affordability and demand, leading homebuyers back to the market."

Segment performance

In the homebuilding division, the company experienced 4% revenue growth to $5.2 billion for the three months ended May 31, 2019, compared to the prior year. The increase was driven by a higher number of homes delivered (up 5% year-on-year), which was only partially offset by a fall in the average selling price of homes by 1%. Sales incentives on homes delivered amounted to $26,600 per home in the reported quarter.

The company delivered a total of 12,729 homes in the quarter, up 5%. New orders rose 1% year-over-year to 14,518 homes. Additionally, the company’s backlog declined 3% to 19,061 homes.

Financial Services had impressive operating earnings of $62.5 million in the second quarter, owing to expansion in the mortgage business due to a fall in the general and administrative expenses that more than compensated for the decrease in retail origination volume.

Lennar Multi-Family reported an operating loss of $3.9 million, largely due to general and administrative expenses and equity in loss.

Last word

The decline in mortgage rates helped Lennar’s overall performance, which is evident from the company’s quarterly numbers. This lifted the company amid a slowing market and helped it capitalize on the spring selling season. Further, the drop in lumber prices aided Lennar’s bottom line, resulting in better margins.

In addition, the company has been reaping benefits from its strong presence in key markets such Texas, which saw orders climb more than 3%.

Disclosure: I do not hold any position in the stock mentioned.

Read more here: 

CarMax Posts Stronger-Than-Expected 1st-Quarter Earnings 

Key Takeaways From Kroger’s 1st-Quarter Earnings 

Oracle Posts 4th-Quarter Earnings Beat 

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

Mayank Marwah
A seasoned writer with keen interest in the automotive, technology, telecommunication, retail and aerospace sectors.

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Performances of the stocks mentioned by Mayank Marwah


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK