Lennar reports $15 million 1Q income on higher sales orders
Homebuilder Lennar (LEN) reported income of $15 million, or 8 cents a share, in its first quarter ended Feb. 29 as sales orders increased 33% from a year earlier.
In the first quarter of 2011, the firm reported $27.4 million, or 14 cents a share, which included $37.5 million related to the receipt of a nonrecurring litigation settlement.
The surge in new orders helped the Miami-based homebuilder beat analyst estimates of 5 cents a share, according to Zacks Investment Research.
Sales orders in the quarter rose to 3,022 from 2,267 a year earlier.
"New sales orders in the first quarter were encouraging,” Chief Executive Stuart Miller said. “We have seen the market stabilize, driven by a combination of low home prices and low interest rates, making the decision to purchase a new home more attractive, compared to the heated rental market.”
Revenue from home sales also rose 33% in the first quarter to $610.7 million from $457.9 million a year earlier. The higher figure is a result of a 3% increase in the average sales price of homes delivered -- from $240,000 to $260,000 -- and a 30% increase in home deliveries.
New home deliveries increased to 2,472 homes in the quarter from 1,903 homes in the year-ago period.
Miller said Lennar began to reduce sales incentives in some communities and experienced a “noticeable improvement in our sales pace per community, which should lead to a significant increase in the operating leverage of our homebuilding segment in the second half of the year."
In the first quarter of 2012, operating earnings for the Rialto Investments segment totalled $5.1 million, compared to $23.0 million in the same period of 2011. Lennar’s Rialto Capital subsidiary provides advisory services, ongoing asset management services and acquires and monetizes distressed loans and security portfolios.
"Our Rialto segment continues to show strength,” Miller said. “Rialto remains intensely focused on maximizing the value of its assets, which it purchased at significant discounts; however, the timing of these asset resolutions varies from quarter to quarter.”