Lennar Tops Profit Estimates as Deliveries Jump 16%, New Orders Rise 23%

Lennar's backlog in the quarter was 15,577 homes with a dollar value of $6.3 billion, down 4%.
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Lennar (LEN) - Get Report, the homebuilder, posted fiscal fourth-quarter earnings and revenue that topped Wall Street estimates as deliveries and new orders in the period jumped.

The company earned $2.13 a share in the fourth quarter, beating estimates of $1.90. Revenue of $6.97 billion rose 7.9% from a year earlier and topped expectations of $6.51 billion.

New orders in the fourth quarter rose 23% to 13,089 homes. New home deliveries jumped 16% to 16,420 homes.

Lennar said in a press release Wednesday that its backlog at the end of the quarter of $6.3 billion fell 4%. The backlog was 15,577 homes.

Lennar Q4 Earnings Graphic

"Our fourth quarter showcased our company hitting on all cylinders as our operations continued to improve cash flows and returns," said Stuart Miller, executive chairman of Lennar in a statement. "We made significant progress towards becoming a land lighter company by reducing our years owned supply of homesites to 4.1 years at year-end from 4.4 years at the end of the third quarter and increasing our controlled homesites as a percentage of our total homesites to 33% from 30% during the fourth quarter."

The company's gross margin on home sales was 21.5% in the fourth quarter.

"During the fourth quarter, the basic underlying housing market fundamentals of low unemployment, higher wages and low inventory levels remained favorable," said Jon Jaffe, president. "Against this backdrop, our homebuilding gross margin in the fourth quarter was 21.5%."

Lennar said it expects deliveries in 2020 of 54,000 to 55,000 homes, and homebuilding gross margin percentage in the range of 20.5% to 21%. Deliveries in fiscal 2019 were 51,491 homes, an increase of 13% from a year earlier.

The stock was rising 1.51% in trading Wednesday to $58.