MIAMI -- Shares of major U.S. homebuilders rose Thursday after Lennar's ( LEN) second-quarter earnings report showed a significant spike in sales of completed homes and new orders compared with the prior three-month period.Lennar reported Thursday a 47% increase in sales of completed homes and a 63% jump in orders from the first quarter. Lennar also reported a 15% cancellation rate for the second quarter, considerably smaller than the 22% posted in the same quarter last year. Revenue dropped to $891.9 million from $1.13 billion on a year-over-year basis, but the Miami-based builder still managed to beat Wall Street's $597.5 million revenue estimate. All that news sent Lennar's shares up as much as 18% after closing at $7.82 per share on Wednesday. Lennar rose $1.37, or 17.5%, to $9.19 at the close Thursday. Investors in other homebuilders appeared motivated by Lennar's results. KB Home ( KBH) rose $1.13 , or 8.3%, to $14.77, while Centex ( CTX) gained 47 cents, or 5.8%, to $8.58. Pulte Homes ( PHM) was up 49 cents, or 5.8%, to $8.96, and Toll Brothers ( TOL) increased 85 cents, or 5.2%, to $17.09. The positive news in Lennar's report seemed to overshadow the company's slightly larger loss from last year's second quarter. Lennar lost $125.2 million, or 76 cents a share, for the three months ended May 31. Lennar posted a loss of $120.9 million, or 76 cents a share, in the second quarter last year. The quarterly loss included 38 cents per share for adjustments in the value of land and inventory, and a 27 cents-per-share charge related to tax asset values.
Despite the improvement from this year's first quarter, home deliveries were down 18% and new orders fell 19% when compared with the second quarter of 2008. The average sales price slid about 8% to $251,000. Lennar's report came a day after the Commerce Department said new U.S. home sales dipped 0.6% in May to a seasonally adjusted annual rate of 342,000, from a downwardly revised April rate of 344,000. The results fell far short of economists' forecasts. In a research note, Raymond James analyst Buck Horne wrote that Lennar's second-quarter loss was smaller than his estimate of 80 cents per share, partly due to more deliveries, lower expenses as a percentage of revenues, and a slower cancellation rate than expected.