Lennar Corp Misses Estimates on Strong Demand, Affordability Concerns
Lennar Corp, the second-largest US homebuilder by sales, reported fourth-quarter earnings that missed Wall Street estimates due to concerns over affordability amidst volatile mortgage rates. The company’s shares fell 7.5% in aftermarket trade following the release of its quarterly results.
According to analysts’ estimates, Lennar’s adjusted earnings per share came in at $4.06, short of the predicted $4.16. The company reported revenue of $9.95 billion for the quarter, missing the estimated $10.08 billion.
Lennar’s co-CEO, Stuart Miller, attributed the results to affordability limitations brought on by higher interest rates, stating that demand remained strong and the chronic supply shortage continued to drive the market. The company’s average sales price of $430,000 for the quarter decreased from $441,000 a year earlier due to adjustments in prices caused by an increased use of incentives and a changing product mix.
The company expects to deliver 17,000 to 17,500 homes in the first quarter of 2025, a 7% decrease from the 22,206 homes delivered in the fourth quarter ended November 30. Home sales gross margins were reported at 22.1% in the quarter, down from 24.2% in the previous year.