Lennar Corp. (NYSE: LEN) reported second-quarter fiscal 2016 results before markets opened Tuesday. The homebuilder reported diluted earnings per share (EPS) of $0.95 on total revenues of $2.75 billion. In the same period a year ago, Lennar reported EPS of $0.79 on revenue of $2.39 billion. Second-quarter results also compare to consensus estimates for EPS of $0.86 and revenues of $2.53 billion.
Quarterly revenue from new home sales rose 17% compared with the second quarter of 2015 to $2.4 billion, primarily as a result of a 12% increase in the number of home deliveries, excluding unconsolidated entities, and a 4% increase in the average sales price of homes delivered. Lennar delivered 6,711 homes in the quarter, well above the 5,989 delivered in the same quarter of 2015.
Sales incentives increased from $21,500 a year ago to $21,800 in the second quarter of this year. In the first quarter of 2016, the average sales incentive was $21,600. As a percentage of the sales price, incentives fell from 5.8% per home in the year-ago quarter to 5.7%.
The company’s CEO, Stuart Miller, said:
The homebuilding market continued its slow and steady recovery sustained by low interest rates, modest wage growth, positive consumer confidence and low unemployment levels combined with tight inventory levels. … As the recovery has continued to mature, we have remained focused on our strategy of moderating our growth rate in community count and home sales, as well as on our soft-pivot land strategy, targeting land acquisitions with a shorter average life. … With a strong balance sheet, a backlog of homes with a value of $3.3 billion and a solid strategy in our core and ancillary businesses, we are well positioned to continue our strong performance for 2016.
The company offered no guidance, but reported that its backlog of new homes at the end of the quarter totaled 9,014, up 12% from the same period a year ago. For the full year, EPS is expected to reach $4.23 on revenues of $10.81 billion.
Shares closed Monday at $46.66 in a 52-week range of $37.14 to $56.04 and traded up nearly 5% at $48.95 in Tuesday morning’s premarket session.