Housing names are trading lower across the board today, despite one of the nation’s largest homebuilders reporting better-than-expected financial results.
On Tuesday, Lennar (NYSE:LEN) announced earnings for the fourth quarter. Net income came in at $124.3 million (56 cents per share), compared to $30.3 million (16 cents per share) a year earlier. Revenues for the three-month period ended November 30, 2012 surged 42 percent to $1.35 billion, as gross margin on homes improved 410 basis points. On average, analysts polled by Thomson Reuters expected earnings of 44 cents with revenue of $1.31 billion.
Stuart Miller, chief executive officer, explains in a statement, “Our fourth quarter reflects the recovery in housing with solid profitability in all of our business segments. Our homebuilding sales pace continued to grow with a 32 percent increase in new orders, while our homebuilding gross margin percentage increased 410 basis points over last year to 23.5 percent and our homebuilding operating margin percentage increased 660 basis points over last year to 12.2 percent. Our homebuilding machine continues to improve and be our primary driver of profitability, fueled by our opportunistic land acquisitions and increasing operating leverage due to higher absorption per community and overall deliveries.”
Shares are trading lower…