Lennar's Profit Quadruples as Deliveries Surge

Lennar's Profit Quadruples as Deliveries Surge .Article Stock Quotes Comments more in Earnings | Find New $LINKTEXTFIND$ ».smaller Larger facebooktwitterTweetgoogle pluslinked ininShare.0EmailPrintSave ↓ More .
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By MELODIE WARNER
Lennar Corp.'s LEN +2.43%fiscal third-quarter earnings quadrupled from a year earlier, thanks in part to a tax benefit, as more deliveries contributed to the homebuilder's stronger-than-expected revenue.
"In homebuilding, we continue to see strong sales trends translating into increased deliveries, stronger gross margins and improved operating leverage," said Chief Executive Stuart Miller. "While materials and labor costs are moving higher, sales-price increases and incentive reductions should continue to offset the impact of increasing costs."
Lennar has seen increased revenue in recent quarters as the housing industry appears to be recovering from the worst downturn in generations. The company is considered one of the sector's strongest players by some analysts, as it has remained profitable for nearly three years.
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.The National Association of Realtors last week said sales of previously occupied homes and construction of single-family homes reached the highest level in more than two years during August. According to the trade group, existing-home sales increased 7.8% in August from a month earlier, while housing starts increased 2.3%.
Meanwhile, Moody's Investors Service raised its outlook on U.S. homebuilders this month to positive from stable, saying low interest rates, strong affordability and pent-up demand offer a boost to homebuilders' prospects.
For the quarter ended Aug. 31, Lennar reported a profit of $87.1 million, or 40 cents a share, up from $20.7 million, or 11 cents a share, a year earlier. The most-recent quarter included a $12.8 million income-tax benefit related to the reversal of deferred tax assets. Revenue jumped 34% to $1.1 billion.
Analysts polled by Thomson Reuters most recently had forecast earnings of 28 cents on revenue of $1.05 billion.
Gross margin on home sales improved to 23.2% from 21.2%.
New home deliveries increased 28% to 3,655 homes, while the cancellation rate was 17%. The average selling price climbed 4.5% to $258,000.
Orders jumped 44% to 4,198 homes, and the company's backlog, an indication of future business, grew 79% to 4,513 homes.