Lennar Builds Up on Earnings Beat

(Lennar earnings report updated with analyst commentary.)

MIAMI (TheStreet) -- Lennar(LEN) shares surged on Tuesday after the homebuilder posted better-than-expected fiscal-fourth quarter earnings.

The homebuilder booked profits of $32 million, or 17 cents per share, in the three months ended Nov. 3, down from year-earlier earnings of $35.6 million, or 19 cents per share. Year-earlier results include a $320.5 million tax benefit.

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Revenue came in at $860.1 million, down 5.9% from $913.7 million in the fourth quarter last year.

Both top- and bottom-line results came in better than expected. Analysts' consensus call had been for earnings of $3.1 million, or 3 cents per share, on revenue of $759.8 million.

Lennar's Rialto segment, which invests in distressed land, added $12.4 million to its operating earnings.

Investors bid Lennar shares 7% higher in late-afternoon trading on Tuesday. The stock closed Monday down 2.6% at $18.90. The stock is up around 8% year-to-date after rebounding 46.8% in 2010.

Deutsche Bank analyst Nishu Sood noted that Lennar's results were "generally favorable," featuring "profit strength that we have seen across the group recently as well as a decent order number."

Sood said that while Lennar's fundamentals had improved, he cautioned that "a high proportion of earnings continues to come from non-operating sources, which we believe should be treated differently than homebuilding earnings." The analyst pointed to the fact that around 48% of Lennars' full-year income came from its Rialto division.