Lennar Corp tops analysts’ estimates for earnings and revenue in Q3

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Sep 15, 2020
  • Lennar Corp tops analysts’ estimates for earnings and revenue in Q3.
  • It posted £516.49 million of net earnings and £4.55 billion of revenue.
  • The real estate company sold 13,842 houses in the recent quarter.

Lennar Corporation (NYSE: LEN) said late on Monday that its profit and revenue in the fiscal third quarter blew past Wall Street estimates. The U.S. homebuilder attributed higher demand to record-low mortgage rates.

The U.S. housing market has recovered sharply in recent months as the government eased COVID-19 restrictions. In July, U.S. homebuilding posted a record growth since 2016.

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Shares of the company were reported about 4% down in extended trading on Tuesday. At £58.79 per share, Lennar has gained roughly 40% in 2020 so far. Here’s what you should know about how to invest in the stock market.

According to Lennar, orders posted a 16.4% growth in the fiscal third quarter to 15,563 homes. At 13,842, the company sold more houses in the recent quarter versus the year-ago figure of 13,552 homes. Lennar also highlighted in its report on Monday that average selling price for homes climbed from £305 thousand in the comparable quarter of last year, to £307 thousand in Q3.

Executive Chairman Stuart Miller’s remarks on Monday

Executive Chairman Stuart Miller of Lennar Corporation commented on the earnings report on Monday and said:

“Fundamentals in the housing market continues to remain strong supported by record-low interest rates and a continued undersupply of new and existing inventory.”

Lennar reported £516.49 million of net earnings in the quarter that concluded on 31st August, that translates to £1.64 per share. In the same quarter last year, its net earnings were recorded at a lower £397.91 million or £1.23 a share.

Its gross margin, the Miami-based company said, jumped from 20.4% last year to 23.1% in the fiscal third quarter. In terms of revenue, the increase, as per Lennar, was marginal as it reported £4.55 billion in Q3.

What experts had forecast for Lennar’s earnings & revenue in Q3

According to Refinitiv, experts had forecast the company to print a lower £4.25 billion of revenue in the third quarter. Their estimate for earnings per share was capped at £1.20. In the prior quarter (Q2), Lennar had registered a 27% annualised growth in earnings.

In March when the housing market took a hit due to COVID-19 disruptions, Lennar Corp had slid to £22.75 per share. In comparison, the home construction and real estate company posted an annual growth of about 35% in the stock market last year.

At the time of writing, Lennar Corp is valued at £18.66 billion and has a price to earnings ratio of 11.86.

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