Lennar Corp. (LEN) - Get Lennar Corporation Class A Report posted better-than-expected results for its fiscal fourth quarter after the bell Wednesday, citing household formation by millennials and COVID-driven demand for housing
The company reported earnings of $2.82 a share on revenue of $6.4 billion.
In the same period a year ago, the company posted earnings of $2.13 a share on sales of $7 billion. It reported net income of $508.8 million.
It had been expected to earn $2.32 a share, on sales of $6.5 billion, based on a FactSet survey of 18 analysts.
Lennar said in a statement that revenue fell because of a 2% decline in home deliveries driven by “production lost to COVID-19 in the second quarter.”
Gross margins on home sales rose to $1.6 billion, or 25.0%, from $1.4 billion, or 21.5%, in the same quarter a year ago, helped by reduced construction costs and favorable market conditions.
“Our fourth-quarter results benefited from the exceptional performance of our core homebuilding and financial services businesses combined with robust market conditions," said Stuart Miller, executive chairman of Lennar, in the statement. "The confluence of Millennials starting families and creating households of their own, along with the pro-housing effects of the COVID-19 pandemic, has materially strengthened demand. This surge in demand for housing, combined with the market's inability to produce sufficient homes to meet this demand, has exacerbated the already well-documented undersupply of new and existing homes for sale.”
The company forecast an average selling price of $390,000 and gross margins of 23.5% to 23.75% during the fiscal first quarter.
Shares of Lennar rose $2.70, or 3.6%, to $77 in after-hours trading Wednesday. The stock gained 0.6% during the regular session.