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Lennar Earnings Miss: Revenue Strong, Profits Struggle
17 Dec
Summary
- Lennar's Q4 earnings missed analyst expectations, despite strong revenue.
- Home deliveries increased 4% year-over-year, with new orders up 18%.
- Gross margins significantly contracted due to lower prices and higher costs.
Lennar Corporation's fourth-quarter financial results revealed a miss on earnings per share, despite exceeding revenue forecasts. The company reported adjusted earnings per share of $2.03, falling below the anticipated $2.21, while revenue reached $9.4 billion against an expected $9.01 billion. This performance occurred within a market challenged by affordability issues and higher interest rates.
The homebuilder observed a 4% year-over-year increase in home deliveries to 23,034 units and an 18% surge in new orders, totaling 20,018 homes. However, a 10% decline in the average sales price to $386,000 highlighted the impact of incentives aimed at attracting buyers. Gross margins on home sales saw a substantial contraction, dropping to 17.0% from 22.1% in the prior year, attributed to reduced revenue per square foot and elevated land costs.
Looking ahead to the first quarter of fiscal 2026, Lennar projects home deliveries between 17,000 and 18,000 units, with an average sales price between $365,000 and $375,000. Anticipated gross margins are forecasted at 15% to 16%, reflecting seasonal patterns and ongoing market conditions. Despite current short-term challenges, Lennar's leadership remains confident in the company's strong market position and long-term strategy.
