Lennar profit beats on higher home sales

Lennar profit beats on higher home sales

New homes for sale by Lennar home builders.

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Lennar reported a better-than-expected profit on Wednesday, as cheaper mortgage rates led to higher demand for its homes.

The No. 2 U.S. homebuilder’s shares rose more than 2% before the opening bell.

The company said its orders, a key indicator of future revenue, rose 8.5% to 13,369 homes in the third quarter, beating its own expectation of a rise of 5.5% to 7.6%.

But Lennar’s orders in California, one of its biggest markets, have grown a relatively slower pace this year than the company’s total orders, as wealthy Chinese buyers have turned cautious, likely postponing their purchase decision amid a tit-for-tat Sino-U.S. trade war.

“The market continued to solidify through the third quarter, stimulating both the affordability and demand for homes,” Lennar Chairman Stuart Miller said in a statement.

Net income attributable to the company rose 13.3% to $513.4 million, or $1.59 per share, in the quarter ended Aug. 31.

Revenue rose 3.3% to $5.86 billion.

Analysts on average had expected Lennar to earn $1.32 per share on revenue of $5.48 billion.

Published at Wed, 02 Oct 2019 11:54:00 +0000