Lennar posts 2Q earnings beat as demand for affordable housing outstrips supply
Published: 08:30 15 Jun 2023 EDT
Lennar (NYSE:LEN) has reported second-quarter revenue and earnings that beat expectations as the homebuilder benefited from a market where demand is outstripping supply.
The Miami-based company noted that while its average sales price per home delivered was $449,000 in the second quarter, compared to almost $500,000 at the peak last year, home deliveries reached 17,074, up 3% and new orders were 17,885, up 1%, year over year.
It posted revenue total revenues of $8.05 billion for the quarter ended May 31, 2023, down 3.7% from a year earlier but above the $7.28 billion average estimate of analysts surveyed by Zacks Investment Research.
Underlying net earnings amounted to $852 million, or $2.94 per diluted share, down from $4.69 in 2Q 2022 but beating the Zacks estimate of $2.32 per share.
"During the quarter, we continued to see the housing market normalize and recover from the Fed's 2022 aggressive interest rate hikes in response to elevated inflation,” the company’s executive chairman Stuart Miller said in a statement.
“As consumers have come to accept a "new normal" range for interest rates, demand has accelerated, leaving the market to reconcile the chronic supply shortage derived from over a decade of production deficits. Simply put, America needs more housing, particularly affordable workforce housing, and demand is strong when price and interest rates are affordable."
The company's shares rose 2.8% to $118 in pre-market trading.
Contact the author at stephen.gunnion@proactiveinvestors.com
