Homebuilder Lennar (LEN) reported mixed third quarter
results this morning.
Adjusted earnings grew 55% to $1.61/share for the third quarter as revenue rose 74% to $5.7 bln.
Homebuilding revenue grew 83% -- metrics are inflated due to the CalAtlantic acquisition. Deliveries grew 66% to 12,613 homes, above 12,500 guidance. The average selling price of homes delivered grew 11% to $415,00, above $410,000 guidance.
Adjusted gross margins of 21.9% beat 21.5-21.75% guidance but fell year/year primarily due to higher construction and land costs.
However, forward-looking new orders grew 62% to 12,319 homes, which missed 12,500 guidance. The value of new orders grew 73% to $5.1 bln.
Homebuilding stocks remain out of favor as the housing cycle grows long in the tooth while the Fed is poised to continue raising rates.
Last week, KB Home (KBH) reported strong quarterly results, but the stock sold off anyway.
Still, with regards to the housing market, Lennar management remains upbeat.
Executive Chairman Stuart Miller said, "While national economic data has pointed to higher prices and rising interest rates causing slower overall sales, the basic underlying fundamentals of the housing industry of low unemployment, higher wages and low inventory levels remain favorable and are likely to support longer-term strength in the housing market."
Rick Beckwitt, Chief Executive Officer of Lennar, said, "During the quarter, we continued to complete the integration of CalAtlantic to grow our business under one unified operating platform, and we remain right on track to achieve our synergy goals."
Homebuilders Lennar (LEN), Toll Brothers (TOL), PulteGroup (PHM), NVR (NVR), and LGI Homes (LGIH) all hit 52-week lows this morning.
Lennar will host a conference call and update guidance for the fourth quarter at 11:00 this morning.