Falling mortgage rates give Lennar a boost in Q1

Miami-based homebuilder reported 30% increase in deliveries, 24% jump in new orders

National /
Mar.March 27, 2019 01:45 PM

From left: Stuart Miller and Rick Beckwitt

Lennar Corp. reported a boost in net income, revenue and new home deliveries in the first quarter, as the housing market improves, Executive Chairman Stuart Miller said during an earnings call on Wednesday.

The drop in mortgage interest rates and slowed growth of home prices benefitted Lennar and the new home market overall, Miller said. While the market “paused in the back half of 2018,” it corrected itself in the first quarter and is “now on firm footing,” he added. The company’s executives said they are optimistic that the demand for new homes will continue to accelerate.

Miami-based Lennar’s first quarter earnings totaled $239.9 million, or 74 cents per share, up from earnings of $136.2 million, or 53 cents per share in the first quarter of 2018. The company delivered 8,820 homes, up 30 percent, and reported new orders of 10,463 homes, up 24 percent. Lennar said the increase in deliveries was due in part to delayed deliveries from the fourth quarter.

Lennar became the biggest homebuilder in the U.S. after it acquired CalAtlantic in a deal worth $9 billion in 2017.

“Of course, we benefit from the size and scale we have amassed,” Miller said. The company capitalized on an overall weaker market to buy back 1 million of its shares for about $47 million, or an average $47 per share.

Lennar ended the quarter Feb. 28 with $853 million in cash, Diane Bessette, chief financial officer, said. In January, it closed on the sale of Berkshire Hathaway HomeServices Florida Realty to Warren Buffett’s HomeServices of America. Lennar picked the business up in February 2017 as part of its $643 million acquisition of WCI Communities.

In its fourth quarter earnings call, Lennar said it would not release a full forecast for 2019, a sign of tough market conditions. But on Wednesday, CEO Rick Beckwitt said the first quarter of 2019 saw a reversal of trends that resulted in increased traffic to Lennar’s website and its welcome centers. “The combined impact led to increases in new orders,” he said, and “sequential growth in every one of our 37 markets.”


Related Articles

arrow_forward_ios
Lennar's Stuart Miller, Rick Beckwitt  with the site (Google Maps; Lennar)
Lennar pays $8M for South Miami-Dade housing community site
Lennar pays $8M for South Miami-Dade housing community site
From left: Jim Cohen, Nancy Corey, Nathan Zeder, Alicia Cervera Lamadrid, Phil Gutman and Mike Pappas (iStock)
South Florida’s pandemic-fueled residential market poised for bull run in 2021
South Florida’s pandemic-fueled residential market poised for bull run in 2021
Kathleen DuRoss Ford and 300 North Lake Way (Getty, Google Maps)
Kate Ford’s Palm Beach estate sells for $55M
Kate Ford’s Palm Beach estate sells for $55M
D.R. Horton CEO David Auld and the Reserve at Jupiter site 
D.R. Horton pays $14M for land in Jupiter and Florida City for two housing projects
D.R. Horton pays $14M for land in Jupiter and Florida City for two housing projects
Jim Carr and Armando Codina with renderings of the homes (CC Homes)
CC Homes pays $12M for Southwest Ranches land for single-family community
CC Homes pays $12M for Southwest Ranches land for single-family community
Lennar Executive Chairman Stuart Miller (iStock)
“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
Oprah Winfrey and (inset) Lawrence Stroll over the unit (Getty)
You get a condo! Billionaire Lawrence Stroll sells Oprah’s former Fisher Island penthouse
You get a condo! Billionaire Lawrence Stroll sells Oprah’s former Fisher Island penthouse
Lennar's Stuart Miller and 28600 Southwest 132nd Avenue (Google Maps)
Lennar spends $29M on Homestead mobile home park, plans new community
Lennar spends $29M on Homestead mobile home park, plans new community
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...