Homebuilder Stocks: Winners & Losers

Lennar's earnings beat helps lift homebuilder stocks higher Monday; Hovnanian and KB Home also gain.

Author:: Miriam Reimer
Publish date:: Sep 20, 2010 1:56 PM EDT

NEW YORK (

TheStreet

) --

Stocks in the homebuilder sector were mostly higher Monday morning, thanks to a

better-than-expected quarterly report from builder

Lennar

(LEN) - Get Report

, posted before the opening bell.

Homebuilder stocks shrugged off a tepid report from the

the National Association of Home Builders which showed its index of builder sentiment was flat month-over-month in September as high unemployment and high foreclosure rates continued to dissuade people from considering new-home purchases.

>> Homebuilder Sentiment Holds Steady

Leading the sector higher was Lennar, which jumped 8.3% in early-afternoon trading, after the company said its third-quarter earnings were $30 million, or 16 cents per share, a reversal from a year-earlier loss of $171.6 million, or 97 cents. Analysts expected a profit of $7.1 million, or 5 cents per share.

Revenue rose 14.5% to $825 million, easily beating expectations for sales of $777.5 million.

>>Lennar Beats on Return to Profitability

Stifel Nicolaus analyst Michael Widner noted that, based on Lennar's report, the read-through for other industry players was mixed with "the greatest positive indication for

NVR

(NVR) - Get Report

, which is heavily concentrated in the mid-Atlantic."

The analyst said implications are negative for

KB Home

(KBH) - Get Report

, due to report its quarterly financials Friday, because of its high concentration of business in California, a market particularly hard hit by unemployment and foreclosures.

Shares of NVR added 1.2% while KB Home gained 5%.

Other sector winners included

Hovnanian Enterprises

(HOV) - Get Report

and

Beazer Homes (BZH) - Get Report, which warned earlier this month it was no longer sure new-home orders in fiscal 2010 would be higher than fiscal 2009's level of 4,205 homes

>>Beazer Homes: Hard Times Ahead

Beazer cited slower-than-anticipated improvements in new-home orders after the

springtime expiration of federal tax credits for homebuyers

. The company said prospective homebuyers continue to exercise caution in committing to a home purchase as general economic conditions still haven't showed enough improvement.

Beazer shares were 5.4% higher with just over two hours left in the trading session while Hovnanian added 5.8%.

Bucking the trend was

Weyerhaeuser

(WY) - Get Report

, a forest products company that grows and harvests timber but is also engaged in developing real estate and constructing homes. Its shares fell 1.7% on Monday.

The

SPDR S&P Homebuilders

(XHB) - Get Report

, an exchange-traded fund that tracks the sector, gained 2.6%.

-- Written by Miriam Marcus Reimer in New York.

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