Lennar (LEN) second-quarter earnings surged on an increase of the homebuilder's deliveries and new orders, as well as a tax adjustment that boosted gains. The company reported net earnings in the second quarter of $452.7 million, or $2.06 a share, up significantly year-over-year from $13.8 million, or 7 cents a share.
Stuart Miller, the Miami-based company's CEO, said the earnings are evidence that a recovery is under way, but called the process "very localized."
"Evidence from the field suggests that the 'for sale' housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process," he said. "Although highly conservative mortgage lending practices and challenging appraisals remain a constant headwind, we are experiencing net positive price and volume trends in most of our markets."
Earnings for the current quarter include $1.85 a share due to a $403 million net operating loss carryover. Without the adjustment, earnings were 21 cents a share. Miller called the NOL adjustment "really symbolic rather than a significant financial event."
In addition to the boost from the adjustment, Miller said the company's stellar quarter came from lower incentives, higher prices and more cost control efforts on behalf of the company.
The company, which sells homes largely to new buyers and retirees, reported a 20% climb in home deliveries to 3,222 homes. New orders increased 40% to 4,481 homes with only a 16% cancelation rate.
The average sales price of homes delivered rose to $250,000 from $245,000 in the second quarter of 2011, and sales incentives for buyers were lowered to $29,800 per home compared to $33,9000 last year. Its backlog for the quarter rose 61% year-over-year to 3,970 homes.
The company's revenue was up 22% to $930.2 million, beating the estimates of analysts surveyed by Thomson Reuters, who expected revenue of $886 million.
Lennar shares closed at $27.30 on the New York Stock Exchange on Tuesday, and were up 3% in trading before open. The stock has gained almost 40% since the start of the year.