Lennar Corp. (NYSE: LEN) reported first-quarter results that came in below Wall Street expectations, sending shares down about 1% in premarket trading Friday.
The homebuilder reported adjusted earnings per share of $0.88, missing the analyst consensus estimate of $0.95 by $0.07. Revenue totaled $6.6 billion, falling short of the $6.84 billion forecast and declining 13% year over year from $7.6 billion in the same period last year.
During the quarter, Lennar delivered 16,863 homes, a 5% decline compared with the prior year. The average selling price of homes fell to $374,000 from $408,000 a year earlier, representing an 8% drop.
The company said the decline in pricing reflected ongoing market weakness and increased reliance on sales incentives, which averaged about 14% during the quarter. Gross margin on home sales contracted to 15.2% from 18.7% a year earlier, while selling, general and administrative expenses increased to 9.8% of home sales revenue from 8.5%. Net margin was reported at 5.3%.
For the second quarter, Lennar expects to deliver between 20,000 and 21,000 homes with gross margins of 15.5% to 16% and SG&A expenses ranging from 8.9% to 9.1%. The midpoint of the delivery outlook — 20,500 homes — implies sequential improvement as the spring homebuying season progresses.
The company reported 18,515 new orders during the quarter, up 1% year over year, and ended the period with a backlog of 15,588 homes valued at approximately $6.0 billion.
