The stock of Lennar (LEN), the second largest homebuilder in the U.S., is down 3% after the company reported mixed quarterly financial results.
For what was its fiscal third quarter, Lennar announced earnings per share (EPS) of $2.29 U.S., which topped the consensus expectation of $2.10 U.S.
However, revenue of $8.8 billion U.S. was below the $9 billion U.S. forecast on Wall Street.
Additionally, Lennar’s gross margin for the quarter was 17.5%, which was just shy of consensus estimates calling for 17.8%.
Investors had been looking to Lennar’s earnings for signs of improvement in the U.S. housing market, which has struggled coming out of the pandemic as interest rates remain elevated.
Homebuilders in the U.S. have been lowering prices and offering incentives to sell homes and unwind their inventories. They’ve also slowed the pace of new construction.
For its part, Lennar said it used buyer incentives such as mortgage rate buy-downs to keep homes selling in the most recent quarter.
Lennar reported 23,004 new orders during fiscal Q3, more than the 22,522 that was expected among analysts.
However, the company delivered 21,584 homes to buyers, fewer than the 22,414 that Wall Street had anticipated.
Looking ahead, Lennar’s management team said that they expect margins to stabilize at 17.5% in the current quarter. However, that was lower than the 17.7% consensus among analysts.
The homebuilder forecasts 20,000 to 21,000 of new orders in its fiscal fourth quarter, in line with expectations, and also expects to deliver 22,000 to 23,000 homes to buyers.
LEN stock has declined 25% over the past 12 months to trade at $132.87 U.S. a share.
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