Lennar’s first quarter ended February 28, meaning the company packs the worst home-selling season all into one period.
Revenue from new home sales rose 23% compared with the first quarter of 2014 to $1.44 billion, primarily as a result of a 20% increase in the number of deliveries and a 3% increase in the average price. Lennar delivered 4,301 homes in the quarter, well above the 3,597 delivered in the year-ago period. Sales incentives rose from $21,300 a year ago to $21,800 in the first quarter of this year. In the fourth quarter of 2014, the average sales incentive was nearly $23,100. As a percentage of the sales price, incentives remained flat in the first at 6.3% compared with the year-ago period.
The company’s CEO said:
Despite severe weather conditions which constrained production and sales in parts of the country, the housing market continued its slow and steady recovery. Early signals from this year’s spring selling season indicate that the housing market is improving, and disappointing single family starts and permits numbers should rebound shortly. The sizable production deficit of the past years continues to drive demand improvement in spite of the constrained mortgage market. … As an offshoot of the constraint in the mortgage market, rental rates have continued to rise across the country, benefiting our extensive pipeline of rental properties. Rental demand has continued to outpace “for sale” demand, and we expect our maturing rental business to contribute to earnings in the latter part of the year.
The company offered no guidance, but it reported that its backlog of new homes at the end of the quarter totaled 6,817, up 20% from the same period a year ago. The backlog’s dollar value totals $2.40 billion, up 24% from the same period a year ago. The consensus estimates for the second quarter call for EPS of $0.72 on revenues of $2.2 billion. For the full year, analysts forecast EPS of $3.11 on revenues of $8.91 billion.
Shares traded up about 1.6% in premarket Thursday, at $50.50 in a 52-week range of $35.74 to $51.51. Thomson Reuters had a consensus analyst price target of around $48 before the results were announced.
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