Lennar Earnings: The Housing Recovery Strengthens

Lennar Corp. (NYSE:LEN) built a bigger profit in the latest quarter and topped Wall Street’s expectations. The top-line and bottom-line growth delivered by the company to shareholders is a strong indicator of a sustained housing recovery. Shares are flat.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

Lennar Corp. Earnings Cheat Sheet

Results: Net income increased 310.5% to $124.3 million in the quarter versus a net gain of $30.28 million in the year-earlier quarter.

Revenue: Jumped to $1.35 billion from $952.7 million in the year-earlier quarter.

Actual vs. Wall St. Expectations: Lennar Corp. reported adjusted net income of 56 cents per share. By that measure, the company beat the mean analyst estimate of $0.44. It beat the average revenue estimate of 1.26 billion – $1.31 billion.

Quoting Management: “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% increase in new orders, while our homebuilding gross margin percentage increased 410 basis points over last year to 23.5% and our homebuilding operating margin percentage increased 660 basis points over last year to 12.2%. 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,” said Stuart Miller, CEO of Lennar Corporation.

Key Stats:

Revenue decreased 99.91% from $1.1 billion in the previous quarter. Net income increased 42.69% from $87.11 million in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.22 to a profit $0.2. For the current year, the average estimate has moved up from a profit of $2.94 to a profit of $3 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials.)