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Lennar Corp (NYSE:LEN) shares rose more than 3% following the company’s reported Q4 results, with EPS of $2.12 coming in better than the consensus estimate of $1.55. Revenue grew 5% year-over-year to $6.49 billion, beating the consensus estimate of $5.91B.
Deliveries increased 9% year-over-year to 13,659 homes. New orders decreased by 10% to 14,194 homes, with new orders dollar value down 18% to $6.4B. Backlog decreased 29% year-over-year to 19,403 homes, with backlog dollar value down 33% to $9.0B.
“During the quarter, we saw a generally strong economy at the intersection of high inflation and strong employment numbers, while the housing market continued down a winding road of trying to find its footing. In December, interest rates and sticker shock continued to constrain sales activity, while in January and early February, lower interest rates energized sales. In late February, a spike in interest rates impacted website and community traffic and had a slight impact on sales,” said Stuart Miller, Executive Chairman of Lennar.
“The Federal Reserve stayed its course of raising interest rates to cool inflation, though has yet to reach desired results. Homebuyers are considering the possibility that today’s interest rate environment may be the new normal. Accordingly, the housing market continues shifting as growing household and family formation continued to drive demand against a chronic supply shortage.”
For Q2/23, the company expects new orders in the range of 16,000-17,000, deliveries in the range of 15,000-16,000, and an average sales price of $435,000-$445,000. For the full year, the company expects deliveries in the range of 62,000-66,000.
Wolfe Research analysts said LEN delivered strong results.
“While the year is long, we believe LEN’s dynamic pricing model and industry conditions drove some price stabilization in recent months, supporting the company’s profitability in the upcoming quarter,” they wrote in a note.
Oppenheimer analysts also believe Lennar delivered “a strong print and Q2 guidance,” seen as “further proof of improving new home demand.”
