Profit Soars at Lennar

Third-quarter earnings jumped at Lennar (LEN Quote) as the homebuilder raised guidance for its next two full years due to strong demand for its residential homes.

Lennar said third-quarter net income totaled $337.3 million, or $2.06 a share, compared with $225 million, or $1.36 a share, a year earlier. Analysts had expected $1.98 a share on average.

New orders for homes increased 24% year over year in the quarter. The company's $8.1 billion backlog of homes gave the company confidence to increase its guidance for this year and next.

For 2005, the company raised its EPS goal from $7.80 to $8.10, above the average Wall Street estimate of $7.92. For 2006, the company expects EPS of $9.25, higher than the average $8.88 analyst estimate.

Gross margins on home sales for the third quarter were 26.3%, up from 22.9% a year earlier. The average sales price of homes delivered increased 14% to $306,000.

"New home sales activity continued to point to strong consumer demand as our new orders increased 24% year-over-year," Stuart Miller, Lennar's CEO, said in a statement. "As the industry continues to benefit from favorable market conditions, we continue to strengthen our position in strategic markets through organic and acquisitive growth."

Lennar shares rose nearly 2% in after-hours trading to $58.20 on Instinet.