Lennar Corporation (NYSE:LEN) reported third-quarter earnings that fell short of analyst expectations as the homebuilder navigated continued pressures in the housing market. The company posted adjusted earnings per share of $2.00, missing the analyst estimate of $2.10, while revenue came in at $8.8 billion versus the consensus estimate of $8.97 billion.
Shares of Lennar fell 3.3% in after-hours trade following the release of the results, reflecting investor disappointment with the earnings miss and ongoing market challenges.
The company delivered 21,584 homes during the quarter, essentially flat compared to 21,516 homes in the same period last year. However, revenue from home sales decreased 9% YoY to $8.2 billion, primarily due to a 9% decline in the average sales price of homes delivered, which fell to $383,000 from $422,000 a year earlier.
"Our third quarter results reflect both the continued pressures of today’s housing market and the consistency of Lennar’s operating strategy," said Stuart Miller, Executive Chairman and Co-Chief Executive Officer of Lennar. "Achieving these results required additional incentives, resulting in a reduced average sales price of $383,000, and our gross margin drifted down to 17.5%."
Gross margin on home sales declined to 17.5% from 22.5% in the prior-year quarter, while SG&A expenses as a percentage of home sales increased to 8.2% from 6.7% a year ago.
Despite the challenges, new orders increased 12% to 23,004 homes, indicating some underlying demand strength. The company ended the quarter with a backlog of 16,953 homes valued at $6.6 billion.
For the fourth quarter, Lennar expects to deliver between 22,000 and 23,000 homes with an average sales price of $380,000 to $390,000. The company anticipates gross margins to remain at approximately 17.5%, consistent with the third quarter.
During the quarter, Lennar repurchased 4.1 million shares of its common stock for $507 million at an average price of $122.97 per share.
Source :
https://www.investing.com/news/earnings/lennar-misses-q3-expectations-as-housing-market-pressures-continue-4245925
