Lennar Q2 earnings: 'purchasers remained responsive to increased sales incentives'

Lennar Corp (NYSE: LEN) is trading down in extended hours on Wednesday even though it reported better-than-expected financial results for its second quarter.

Lennar's guidance for the third quarter

Investors are concerned because the guidance failed to impress. $LEN now expects to deliver up to 21,000 homes in the second quarter.

New orders, it added, will fall between 20,500 and 21,000 in Q2. Stuart Miller – the co-chief executive of Lennar Corp said in a press release today:

The homebuilder expects average sales price to be around $422,500 in the second quarter helping gross margin on home sales to come in at 23%. Lennar stock is down roughly 10% versus its year-to-date high at writing.

Lennar's Q2 earnings snapshot

Earned $954 million versus the year-ago $872 million
Per-share earnings also improved from $3.01 to $3.45
Total revenue jumped 10% year-over-year to $8.8 billion
Consensus was $3.23 a share on $8.55 billion in revenue

Lennar received 21,293 new orders for homes – up 19% and ended its second quarter with a backlog of 17,873 homes, as per the earnings report. Co-CEO Miller also said on Wednesday:

What else was noteworthy in $LEN Q2 report

In April, Lennar Corp announced 50 cents a share quarterly cash dividend. The homebuilder spent just over $600 million on share buybacks in its fiscal Q2.

The $43 billion giant based out of Miami, Florida delivered a total of 19,690 homes in its recently concluded quarter - up 15% on a year-over-year basis. According to co-chief executive Stuart Miller:

Last week, Brave Warrior Advisors said it cut its stake in Lennar stock by a whopping 43.6% in the fourth quarter. The fund still owns more than half-a-million shares of the construction company at writing.