Shares of Lennar Corporation (NYSE: LEN) surged 2.0% in pre-market trading as the homebuilder announced impressive financial results for its fiscal second quarter. The stock’s rise reflects investor confidence in Lennar’s improved guidance.
Lennar now projects delivering between 68,000 and 70,000 homes this year, surpassing analyst expectations of 63,755 homes.
Stuart Miller, the Executive Chairman of Lennar Corp, expressed optimism about the current market conditions, stating, “As consumers have come to accept a new normal range for interest rates, demand has accelerated, leaving the market to reconcile the chronic supply shortage derived from over a decade of production deficits.”
Key highlights of Lennar Corp’s Q2 earnings include:
- Earnings of $871.7 million, compared to $1.32 billion the previous year.
- Per-share earnings dropped from $3.01 to $1.32.
- Revenue declined 4.0% year-on-year, totaling $8.05 billion.
- Analyst consensus predicted earnings of $2.33 per share on $7.22 billion in revenue.
- Deliveries increased by 3.0% to 17,074, exceeding expectations.
New orders also outperformed expectations, reaching 17,885. According to Chairman Miller:
“America needs more housing, particularly affordable workforce housing, and demand is strong when price and interest rates are affordable.”
What else was noteworthy?
Another positive aspect of the earnings report was the improvement in gross margin on home sales, which rose to 22.5% during the quarter. Chairman Miller expressed satisfaction with the company’s strengthening balance sheet, with liquidity totaling $6.6 billion and cash reserves exceeding its debt.
Lennar stock has already gained over 20% this year, and Wall Street currently holds a consensus “overweight” rating on the company.
