Lennar Corporation (NYSE: LEN) topped market estimates on revenue and earnings for the second quarter of 2019, sending shares climbing 4% in premarket hours on Tuesday. The consensus estimate was for earnings of $1.13 per share on revenue of $5.1 billion.
Total revenues rose 2% year-over-year to $5.6 billion. Net earnings improved to $421.5 million, or $1.30 per share, from $310.3 million, or $0.94 per share, in the prior-year period. The quarterly results benefited from first-quarter deliveries postponed by weather as well as a recovery in the housing market.
During the quarter, total deliveries increased 5% to 12,729 homes. New orders increased 1% to 14,518 homes while the dollar value of new orders was down 4% to $5.8 billion. Backlog decreased 3% to 19,061 homes while the backlog dollar value was down 10% to $7.7 billion.
Jon Jaffe, President of Lennar, said, “During the second quarter, we continued to experience cost pressures due to land and labor shortages. These cost pressures were somewhat offset by a decrease in lumber prices and the benefit of synergies from our CalAtlantic acquisition. In the next two quarters, we expect to see margin improvement driven by a combination of additional lumber savings and direct cost synergies.”
In the Homebuilding segment, revenues from home sales grew 4% year-over-year to $5.2 billion, helped by an increase in the number of home deliveries. New deliveries increased to 12,706 homes from 12,078 homes last year, mainly due to higher home deliveries in the East and Texas segments. The average sales price of homes decreased to $407,000 from $413,000 last year mainly due to product mix.