Shares of Lennar Corporation (NYSE: LEN) were down over 1% on Tuesday. The stock has gained over 16% in the past three months. The homebuilder is scheduled to report its third quarter 2024 earnings results on Thursday, September 19, after market closes. Here’s a look at what to expect from the earnings report:
Revenue
Analysts are projecting revenue of $9.2 billion for Lennar in the third quarter of 2024. This would represent an increase of around 6% compared to the same period last year. In the second quarter of 2024, total revenue increased 9% year-over-year to $8.8 billion.
Earnings
Lennar has guided for EPS of $3.50-3.65 for the third quarter of 2024. Analysts are predicting EPS of $3.63. This compares to adjusted EPS of $3.91 reported in Q3 2023 and $3.38 reported in Q2 2024.
Points to note
The overall macroeconomic environment has remained favorable for homebuilders, with strong demand for housing. However, higher prices, interest rates, and a shortage of homes have hurt affordability. Against this backdrop, homebuilders have been offering incentives such as interest rate buy-downs, closing cost pickups, and price reductions to make home purchases more affordable to buyers.
Last quarter, Lennar’s new home deliveries increased 15% YoY to 19,690 homes. This was offset by a 5% decrease in average sales price of homes delivered, which in turn was caused by pricing to market through higher incentives and product mix. New orders increased 19% to 21,293 homes.
For the third quarter of 2024, Lennar expects new orders and deliveries to both range between 20,500-21,000 homes. Average sales price for Q3 is expected to range between $420,000-425,000.
The housing market is expected to remain generally stable. Interest rate cuts, if implemented, are anticipated to boost housing demand. There is also likely to be an improvement in housing supply.
Last quarter, Lennar’s gross margin rose slightly YoY to 22.6%, helped by a reduction in costs per square foot, partly offset by a drop in average sales price and a rise in land costs. For the third quarter, gross margin is projected to be about 23%.