Lennar Company Earnings Boosted by Backlog

New home
New home

Lennar Corp. (NYSE: LEN) reported second-quarter fiscal 2013 results before markets opened this morning. The home builder reported diluted earnings per share (EPS) of $0.61 on revenues of $1.43 billion. In the same period a year ago, Lennar reported EPS of $2.06 on revenue of $930.16 million. Second-quarter results compare to the consensus estimates for EPS of $0.33 and $1.33 billion in revenue.

For both years, Lennar's earnings include a partial reversal of the state-deferred tax asset valuation allowance. In the second quarter of 2013, this amounted to $0.18 per share, compared with $1.85 in the same period a year ago.

Revenue from new home sales rose 58% compared to the second quarter of 2012, primarily as a result of a 39% increase in the number of deliveries and a 13% increase in the average price. Lennar delivered 4,449 homes in the second quarter, well above the 3,192 delivered in 2012. Sales incentives fell from $29,800 a year ago and $23,300 in the first quarter of this year to $20,200.

The company's CEO said:

Against the backdrop of recent investor concerns over mortgage rate increases, we believe that our second quarter results together with real time feedback from our field associates continue to point towards a solid housing recovery. Our second quarter results reflect significant improvement in all of our key homebuilding and financial services metrics. ... New home production lagged population growth and household formation during the recent economic downturn. New development activity is just starting to accelerate, but land availability will continue to be a constraint for some time, given the length of the downturn.

The company offered no guidance, but reported that its backlog of new homes at the end of the second quarter totaled 6,163, up more than 50% from the same period a year ago. The backlog's dollar value totals $1.9 billion, up 76% from the same period a year ago. The consensus estimates for the third quarter call for EPS of $0.51 on revenues of $1.74 billion.

Shares are up fractionally in premarket trading, at $35.00 in a 52-week range of $25.77 to $44.40. Thomson Reuters had a consensus analyst price target of around $43.40 before today's results were announced.

Filed under: Housing Tagged: LEN