Lennar (LEN), one of the biggest American home builders, has issued fiscal fourth quarter financial results that topped Wall Street forecasts.
The company reported earnings per share (EPS) of $4.82 U.S. and revenue of $11 billion U.S. Analysts had been looking for earnings of $4.59 U.S. and $10.20 billion U.S. in sales.
For the entire fiscal year, Lennar announced earnings of $13.73 U.S. a share on $34.20 billion U.S. in revenue. Both full-year figures also beat expectations, according to data from FactSet.
However, despite the earnings beat, Lennar’s stock is down 3% in premarket trading after the company issued margins on its home sales that disappointed analysts and investors.
Higher interest rates charged on home mortgages continue to cool the housing market, said Lennar in its earnings print.
There is good news on the horizon though after the U.S. Federal Reserve signalled three interest rate cuts in 2024, which should bring mortgage rates lower in the year ahead.
The average 30-year fixed rate mortgage in the U.S. fell below 7% this past week, dropping to 6.95%, its lowest level in months.
Lennar said it received 17,366 new home orders in the fiscal fourth quarter and delivered 23,795 homes, beating estimates that called for 16,816 new orders and 22,070 deliveries.
The company’s new orders rose 32% from a year earlier, while deliveries were up 19%.
However, Lennar reported a gross margin on its home sales of 24.2%, which was lower than the 24.6% that analysts had expected, sending the stock down as a result.
The company said it expects new orders of 17,500 to 18,000 in the first quarter of 2024, and to deliver 16,500 to 17,000 homes during the period.
Prior to today (Dec. 15), Lennar’s stock had risen 68% in 2023 to trade at $154.81 U.S. per share.
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