Lennar Corporation’s (LEN – Free Report) shares gained 5.5% in the pre-market trading session, following the release of third-quarter fiscal 2018 results, wherein earnings surpassed the Zacks Consensus Estimate.
The company’s third-quarter adjusted earnings of $1.40 per share topped the consensus mark of $1.19 by 21 cents. The reported figure mainly excludes acquisition and integration costs related to CalAtlantic Group, Inc.
Including these items as well as backlog/construction in progress write-up related to purchase accounting, the reported figure came in at $1.37 per share in the quarter, increasing considerably from the year-ago profit level of $1.04 per share.
The improvement was primarily attributable to greater demand, courtesy of strong housing market fundamentals, given low unemployment, higher wages and lower inventory levels.
Total revenues of $5.67 billion were on par with the consensus mark but increased 74% year over year as the Homebuilding and Financial Services performed significantly well.
Segment Details
Homebuilding: The segment’s revenues increased 83% from the prior-year quarter to $5.28 billion, driven by higher number of homes delivered and greater average selling prices. Within the Homebuilding umbrella, home sales constituted $5.22 billion (up 83.2% year over year) and land sales amounted to $62 million (up from $37.5 million a year ago).
New home orders increased 62% from the year-ago quarter to 12,319. Potential value of net orders increased 73% year over year to $5.1 billion.
Home deliveries increased 66% from the prior-year quarter to 12,613, buoyed by higher number of homes delivered across all homebuilding segments, courtesy of significant increase in volume resulting from the CalAtlantic acquisition.
The average sales price (ASP) of homes delivered was $415,000, reflecting an increase of 10% year over year.
In the quarter under review, backlog grew 88% from the year-ago quarter to 19,220 homes. Potential housing revenues from backlog increased 105% year over year to $8.4 billion.
