Lennar Corp (NYSE: LEN) reported its financial results for the fiscal second quarter on Wednesday that topped Wall Street estimates as low borrowing costs continued to fuel home demand.
Financial performance
Lennar Corp reported $831.4 million of profit in the second quarter that translates to $2.65 per share. In the same quarter last year, its profit was capped at a lower $517.4 million, or $1.65 per share. The home construction company generated $6.43 billion of revenue – a 22% increase from last year’s $5.29 billion.
According to FactSet, experts had forecast the company to post $6.1 billion of revenue in Q2 and $2.38 of earnings per share. Lennar Corp had topped market estimates in the prior quarter (Q1) as well.
Other notable figures
Lennar Corp noted a 14% year over year growth in home deliveries to 14,493 units. Total new orders, it added, came in 32% higher than the second quarter of the previous year to 17,157 homes. The real estate firm valued new orders at $7.6 billion that represents a 56% annualised increase.
In separate news from the United States, Microsoft CEO Satya Nadella became chairman of the board on Wednesday.
Future outlook
For the fiscal third quarter, Lennar Corp expects up to 16,300 new home orders and 15,800 to 16,100 deliveries. It forecasts average sales price in Q3 to fall in the range of $420,000 to $425,000. For the full financial year, the Miami-based company predicts up to 64,000 deliveries at $420,000 of average sales price.
Executive Chairman Stuart Miller’s remarks
Commenting on the financial update, Executive Chairman Stuart Miller said:
“A combination of strong personal savings rates during the pandemic, strong stimulus from the government and a developing return to normalcy continued to drive the economy forward while bringing the housing market to new heights.”
“The housing market has proven to be robust in the current environment, and we expect it to continue to be a significant driver in the recovery of the overall economy,” he added.
Impact on the share price
Lennar Corp was about 1% up in after-hours trading on Wednesday. Including the price action, the stock is now exchanging hands at $92.30 per share. This compares to a year-to-date high of $108 per share and $74 per share at the start of the year. At the time of writing, Lennar Corp is valued at $27.94 billion and has a price to earnings ratio of 9.31.
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Wajeeh Khan
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