May 29, 2020

Lennar Profit Is Up on Housing Recovery

Shares of the company, however, slipped 0.83 percent on concerns that the growth in orders was slowing and that part of the gain in profit had come from a one-time accounting gain.

“Low mortgage rates, affordable home prices, reduced foreclosures and an extremely favorable ‘rent vs. own’ comparison continue to drive the recovery,” the chief executive, Stuart Miller, said in a statement.

The 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 start construction projects. Single-family home prices rose in October, for nine straight months of gains, recent figures show.

Mr. Miller said that Lennar was “extremely well positioned” to gain market share in 2013 and that the company expected to be strongly profitable. The PulteGroup and D.R. Horton are the top two American home builders.

Lennar, which is based in Miami, 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.

Its operating margin on home sales was 12.2 percent, up 6.6 percentage points, helped by an increase in selling prices and a decline in buyer incentives. Orders rose 32 percent, to 3,983 homes, while its backlog at the end of the quarter was worth $1.2 billion.

Net income rose to $124.3 million, or 56 cents a share, in the fourth quarter, from $30.3 million, or 16 cents a share, a year earlier. Revenue rose 42 percent, to $1.3 billion. Analysts had expected earnings of 44 cents a share on revenue of $1.31 billion, according to Thomson Reuters.

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