Lennar Profit Soars as Deliveries Jump; Shares Fall
Lennar's quarterly profit handily beat Wall Street expectations and the homebuilder reported a seventh straight jump in new home orders, indicating that a U.S. housing recovery is well on track.
"Low mortgage rates, affordable home prices, reduced foreclosures and an extremely favorable 'rent vs. own' comparison continue to drive the recovery," Chief Executive Stuart Miller said in a statement.
The U.S. housing market, which fell into a deep rut six years ago, has been recovering as low interest rates and rising rents are prompting consumers to buy homes.
Home sales and prices are rising, encouraging builders to undertake new construction projects. Single-family home prices rose in October for nine months in a row, recent data show.
Lennar delivered 4,443 homes, up 32 percent, in the fourth quarter, while the average selling price of the homes delivered rose 7 percent to $261,000.
Miami-based Lennar's operating margin on home sales was 12.2 percent, up 660 basis points, due to an increase in selling prices and fewer buyer incentives.
CEO Miller said Lennar was "extremely well positioned" to gain market share in 2013 and that the company expects to be strongly profitable. (Read More: Already Time to Throw Up Caution Signs on Housing?)
Net income rose to $124.3 million, or 56 cents per share, in the fourth quarter, from $30.3 million, or 16 cents per share, a year earlier.
Revenue rose 42 percent to $1.3 billion.
Analysts were expecting earnings of 44 cents per share on revenue of $1.31 billion, according to Thomson Reuters I/B/E/S.
Orders rose 32 percent to 3,983 homes, while its backlog at the end of the quarter was worth $1.2 billion.
Lennar's stock, which doubled in value in 2012 and is trading at levels last seen in 2007, was off 2 percent in premarket trading despite the earnings beat.