Lennar Corp., the second-largest U.S. homebuilder, reported fiscal second-quarter earnings that beat analysts' estimates as the improving job market helped boost sales.
Net income for the three months through May was $218.5 million, or 95 cents a share, compared with $183 million, or 79 cents, a year earlier, the Miami-based company said in a statement Tuesday. The average estimate of 13 analysts was for earnings of 87 cents a share, according to data compiled by Bloomberg.
Lennar, which has been able to operate with relatively large profit margins because it loaded up on land at distressed prices after the real estate crash, has a diverse group of divisions, including multifamily and commercial real estate asset management and finance. Its homebuilding division is benefiting from low mortgage rates and the declining unemployment rate, which is giving buyers more confidence.
Lennar rose 2.1% to $47.69 at 9:49 a.m. Eastern time after earlier climbing as much as 3.3%. It was the biggest advance in an S&P index of U.S. homebuilders, which gained 1%.
"Most trends including homebuilding revenue slightly exceeded our forecast," Keefe, Bruyette & Woods Inc. analysts led by Jade Rahmani wrote in a note to clients after the results were released. "We continue to believe Lennar's strong homebuilding operations and ancillary businesses justify a premium valuation."
The builder delivered 6,724 homes in the quarter, up 12% from a year earlier. The average selling price climbed 4% to $362,000. New orders rose 10% to 7,962 homes.
