Lennar's (LEN) Q4 Earnings Beat, Revenues Miss Estimates

Lennar Corporation (LEN - Free Report) reported fourth quarter of fiscal 2018 (ended Nov 30, 2018) results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Management acknowledges that sales continued to be impacted by housing market headwinds like rising mortgage rates and higher home prices. Nonetheless, it believes that underlying fundamentals of lower unemployment, higher wages and low inventory levels remain conducive to the industry.

The company’s fourth-quarter adjusted earnings of $1.96 per share topped the consensus mark of $1.93 by 1.6%. The reported figure mainly excludes acquisition and integration costs related to CalAtlantic Group, Inc. as well as the gain on sale of Rialto investment and asset management platform.

Including these items as well as backlog/construction in progress write-up related to purchase accounting, the reported figure came in at $2.42 per share in the quarter, increasing considerably from the year-ago profit level of $1.29.

Total revenues of $6.46 billion missed the consensus mark of $6.53 billion but increased 70.6% year over year as the Homebuilding, Financial Services and Multifamily business segments performed significantly well.

Lennar Corporation Price, Consensus and EPS Surprise

Lennar Corporation Price, Consensus and EPS Surprise | Lennar Corporation Quote

Segment Details

Homebuilding: The segment’s revenues increased 77.8% from the prior-year quarter to $6.07 billion, driven by higher number of homes delivered and greater average selling prices. Within the Homebuilding umbrella, home sales constituted $5.95 billion (up 78.5% year over year) and land sales amounted to $114.2 million (up 47.9%).

New home orders increased 44% from the year-ago quarter to 10,611. Potential value of net orders increased 49% year over year to $4.2 billion.

Home deliveries increased 64% from the prior-year quarter to 14,154, buoyed by higher number of homes delivered across all homebuilding segments, courtesy of significant increase in volume resulting from the CalAtlantic acquisition.

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