Lennar cuts delivery target as quarterly earnings fall

Lennar ($LEN) lowered its fiscal-year home-delivery target to 80,000–81,000 from 82,000–83,000 after a weaker third quarter. Net earnings fell to $284 million, or $1.19 per share, from $591 million, or $2.29 per share, a year earlier. Revenue declined to approximately $8 billion from $8.8 billion, reflecting pressure on the builder’s sales and profitability.

New orders dropped 9% to 20,879 homes, while deliveries slipped 3% to 20,840. The home-sales gross margin narrowed to 15.8% from 17.5%, and management forecast a further range of 15.5–16% for the fourth quarter. These operating measures distinguish the earnings decline from a purely accounting-driven change. The revised annual delivery range also signals that the company expects fewer completed home sales than it had previously planned.

Sources:

• Lennar — third-quarter results, company release reprint