One of the nation’s largest home builders crushed market expectations on Wednesday June 24th, signalling that a housing recovery may be here at long last.
Lennar Corp. (NYSE/LEN) posted strong second-quarter earnings of $0.79 per share, up from $0.61 during the same period last year. Revenue growth skyrocketed 46% to $2.4 billion from $1.64 billion in the previous quarter. (Source: Lennar Press Release, June 24, 2015.)
“The homebuilding market continued its steady improvement throughout our second quarter,” said Stuart Miller, CEO of Lennar Corp.
“Driven by higher wages and employment, reasonable affordability levels, supply shortages and favorable monthly payment comparisons to rentals, the homebuilding market is well positioned for multi-year growth ahead,” Miller added.
The housing recovery was evident in Lennar’s financial results. While the volume of new home sales was up 18%, the dollar value of sales rose 28%, reflecting an upswing in prices.
The company’s average house price climbed to $348,000 from $326,000 in the first quarter of 2015.
Lennar’s only setback came from its rental properties unit. The division posted an operating loss of $8.7 million, mostly due to fees and administration costs.
However, the firm remains committed to its $6.0 billion pipeline of investments in the rental market. Their forward guidance indicates an expectation that the division will contribute significantly to future earnings.
Miller ended his statement by saying, “while our homebuilding business continues to be the primary driver of our quarterly earnings, we are in an excellent position across our multiple platforms and anticipate that our ancillary businesses will continue to further define themselves going forward.”