News

Lennar Reports Profit and Revenue Beat Despite Decline in Home Prices

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4.6

Andrew R. Michaud

• September 14, 2023

Lennar, the renowned homebuilder, reported a decline in profit and revenue for the fiscal third quarter due to lower home prices. However, the company still managed to surpass analysts' estimates. Here are the key details:

Net Income

• Lennar's profit amounted to $1.11 billion, or $3.87 per share, compared to $1.47 billion, or $5.03 per share, during the same period last year.
• According to FactSet, analysts were expecting earnings of $3.53 per share.

Revenue

• The company's revenue decreased to $8.73 billion from $8.93 billion in the previous year.
• Despite the decline, Lennar exceeded analysts' expectations of $8.49 billion in revenue.

Adjusted Earnings

• Lennar's adjusted earnings were $3.91 per share after accounting for certain one-time items.
• Analysts projected adjusted earnings of $3.52 per share.

Key Factors

Demand

• Co-Chief Executive Stuart Miller emphasized that rising interest rates have been beneficial for homebuilders.
• The housing supply shortage, coupled with strong primary and pent-up demand, has contributed to a robust sales environment.
• Homeowners are less inclined to sell their properties due to higher mortgage costs, driving up demand for new homes.

Average Price

• Lower home prices impacted revenues in the quarter.
• The average sales price of deliveries saw a decline of 9%.
• Lennar attributed this decrease primarily to market conditions.

Outlook

• Lennar predicts that fourth-quarter sales prices will remain consistent with the third quarter.
• The company expects to deliver between 21,500 and 22,500 homes, surpassing the forecast of 20,389 by analysts.
• Additionally, Lennar foresees new orders ranging from 16,200 to 17,200, compared to analysts' estimates of 16,239.