Lennar Corp., the second-largest U.S. homebuilder, reported fiscal first-quarter earnings that beat analysts' estimates and said new orders increased, signaling the start to a strong spring selling season.
Lennar is riding a wave of buyer confidence as job growth picks up and the supply of previously owned properties is the tightest it's ever been. New orders climbed 12% from a year earlier, the Miami-based company said in a statement Tuesday. That beat the consensus estimate of a 7.7% increase, Robert Wetenhall, an analyst with RBC Capital Markets in New York, said in a note to clients.
"Lennar has certainly become viewed as one of the better operators in the space and has been rewarded with a higher valuation than many of their peers," Megan McGrath, an analyst at MKM Holdings, said by phone before the builder released earnings.
Construction of new single-family homes in the U.S. rose 6.5% in February to an 872,000 annual pace, the fastest rate since October 2007, according to Commerce Department data.
Lennar's net income for the three months through February was $130.8 million, or 56 cents a share, compared with $144.1 million, or 63 cents, a year earlier, the company said Tuesday. The average estimate of 12 analysts was for earnings of 55 cents a share, according to data compiled by Bloomberg.
The company delivered 5,453 homes in the quarter, up 13% from a year earlier. Revenue from home sales increased 13% to $2 billion.
"Since November we have seen a combination of renewed optimism, wage and job growth, and consumer confidence," Chief Executive Officer Stuart Miller said in the statement. "As a result, our homebuilding operations have gone from slow and steady to a faster-than-expected sales pace."
