Lennar Corp., the second-largest U.S. homebuilder, reported fiscal second-quarter earnings that beat estimates as the revived economy spurs new housing demand.
Net income for the three months through May was $183 million, or 79 cents a share, compared with $137.7 million, or 61 cents, a year earlier, the Miami-based company said in a statement Wednesday. The average estimate of 12 analysts was for earnings of 64 cents a share, data compiled by Bloomberg show.
Builders have been expecting sales to improve as the economy strengthens, low mortgage rates help make purchases affordable and millennials move into their prime home buying years. New-home sales in May rose to an annual pace of 546,000, the highest rate since February 2008, the Commerce Department reported Tuesday.
"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 multiyear growth ahead," Chief Executive Officer Stuart Miller said in the statement.
Lennar builds homes for first-time and move-up buyers, retirees and multiple-generation households in 17 states. It also invests in apartments, master-planned communities, mortgage financing and commercial real estate.
Earnings were announced before the start of regular U.S. trading. Lennar shares fell 1% to $49 on Tuesday. They're up 9.4% this year, compared with a 9.6% increase for the 22-company Bloomberg index of homebuilders.
Lennar's new orders for the quarter increased 18% to 7,271 homes and the value of orders climbed 28% to $2.6 billion. Orders for new houses usually rise in the three months through June as families try to time their moves for school vacations.
Revenue rose 32% to $2.4 billion. Lennar's gross margin on home sales was 23.8%, compared with 23.1% in the fiscal first quarter and 25.5% a year earlier.
