Lennar Corporation Earnings: Net Income Sinks

S&P 500 (NYSE:SPY) component Lennar Corporation (NYSE:LEN) reported its results for the fourth quarter. Lennar builds affordable move-up and retirement homes primarily under the Lennar brand name throughout the United States.

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Lennar Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the residential construction company fell to $30.3 million (16 cents per share) vs. $32 million (17 cents per share) a year earlier. This is a decline of 5.5% from the year earlier quarter.

Revenue: Rose 10.8% to $952.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: LEN fell short of the mean analyst estimate of 18 cents per share. It beat the average revenue estimate of $914 million.

Quoting Management: Stuart Miller, Chief Executive Officer of Lennar Corporation, said, “We are pleased to report EPS of $0.16 for our fourth fiscal quarter of 2011, making this our seventh consecutive quarter of profitability. Despite operating in a challenging real estate market, we achieved profitability in all of our business segments.” “During the quarter, we continued to manage our homebuilding business carefully with tight controls over our costs and a focus on improving our gross margins. We benefited greatly from our strategic capital investments in new higher margin communities, which helped us produce a 21.6% gross margin, excluding valuation adjustments, in the fourth quarter.”

Key Stats:

The company fell short of estimates last quarter after being in line with expecations the quarter before with net income of 11 cents.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved up from 6 cents a share to 7 cents over the last sixty days. For the fiscal year, the average estimate has moved down from 53 cents a share to 51 cents over the last ninety days.

Competitors to Watch: PulteGroup, Inc. (NYSE:PHM), KB Home (NYSE:KBH), D.R. Horton, Inc. (NYSE:DHI), Standard Pacific Corp. (NYSE:SPF), Meritage Homes Corporation (NYSE:MTH), Toll Brothers, Inc. (NYSE:TOL), M.D.C. Holdings, Inc. (NYSE:MDC), Orleans Homebuilders (OHBIQ), The Ryland Group, Inc. (NYSE:RYL), and Comstock Homebuilding Companies, Inc. (NASDAQ:CHCI).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks).

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com