Lennar reports a 27% year over year increase in Q2 earnings despite COVID-19 restrictions

Lennar reports a 27% year over year increase in Q2 earnings despite COVID-19 restrictions
Written by:
Wajeeh Khan
16th June, 13:24
  • Lennar reports a 27% year over year increase in Q2 earnings despite COVID-19 restrictions.
  • The U.S. real estate company records a 5% year over year decline in its revenue in Q2.
  • The home construction company now expects 50,500 to 51,000 new home orders in fiscal 2020.

Lennar (NYSE: LEN) released its quarterly financial results on Monday that topped analysts’ estimates for earnings in the second quarter while the revenue came in line with the forecast. Shares of the company initially jumped about 3% in after-hours trading on Monday but later retreated to the price at which the stock closed the regular session.

At £50.12 per share, Lennar is currently more than 10% up year to date in the stock market after recovering from a low of £23.16 per share in March. Learn more about how to choose winning stocks.

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Lennar’s Q2 financial results versus analysts’ estimates

In its report on Monday, Lennar posted £4.18 billion in revenue in the second quarter that was in line with what the experts had forecast. In terms of earnings per share (EPS), the company recorded £1.30 versus the analysts’ estimate of £1.02 per share in Q2. On a year over year basis, Lennar’s earnings came in 27% higher, but revenue declined by 5%.

Chairman Stuart Miller of the home construction company commented on the earnings report on Monday and expressed confidence in a significant recovery in business in the second quarter. On a year over year basis, Miller said, Lennar’s deliveries remained flat in the quarter while the total new orders by the end of Q2 came in 10% lower. As per the chairman:

“While unemployment increased throughout the quarter due to impacts from the COVID-19 pandemic, customers moved from rental apartments and from densely populated areas to purchase homes, and home sales grew steadily, as record-low interest rates and low inventory levels drove a favourable rebound in the homebuilding industry.”

Lennar reports £408.37 million net income in Q2

At £408.37 million, the Miami-headquartered company’s net income registered a 22.8% growth as compared the year-ago figure of £332.65 million.

Lennar now expects 50,500 to 51,000 new home orders in fiscal 2020. On home sales, the company expects roughly 21.5% of gross margin and about 13% of net gross margin in the current financial year. Lennar’s financial results follow Deere & Company that released its quarterly earnings report on 22nd May.

Lennar’s performance was reported largely upbeat in the stock market last year with an annual gain of roughly 40%. At the time of writing, the U.S.-based real estate company has a market cap of £15.19 billion and a price to earnings ratio of 10.06.  

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