Lennar reports a strong second quarter as ‘demand has accelerated’

Shares of Lennar Corp (NYSE: LEN) gained 2.0% in extended hours after the homebuilder reported better-than-expected results for its fiscal second quarter.

Lennar stock up on strong guidance

The stock is being rewarded for the raised guidance as well. Lennar now expects to deliver between 68,000 and 70,000 homes this year.

In comparison, analysts were at 63,755. In the earnings press release, Stuart Miller – the Executive Chairman of Lennar Corp said:

As consumers have come to accept a new normal range for interest rate, demand has accelerated, leaving market to reconcile the chronic supply shortage derived from over a decade of production deficits.

Lennar Corp Q2 earnings snapshot

• Earned $871.7 million versus the year-ago $1.32 billion
• Per-share earnings also tanked from $3.01 to $1.32
• Revenue declined 4.0% year-on-year to $8.05 billion
• Consensus was $2.33 a share on $7.22 billion revenue
• Deliveries climbed 3.0% to 17,074 – also ahead of estimates

New orders also surpassed estimates to come in at 17,885. According to Chairman Miller:

America needs more housing, particularly affordable workforce housing, and demand is strong when price and interest rates are affordable.

What else was noteworthy?

Other prominent figures in the earnings report include gross margin on home sales that improved to 22.5% in the recently concluded quarter. Chairman Miller added:

We continue to strengthen our balance sheet. With liquidity of $6.6 billion and cash on hand exceeding our debt, our balance sheet has never been in a stronger position.

Wall Street currently has a consensus “overweight” rating on Lennar stock that’s already up more than 20% for the year at writing.