Lennar posts profits, record margins for Q2
Net income for home builder Lennar was $137.7 million for the second quarter of 2014, up slightly from the $137.4 million it reported for the same period of 2013. Revenues from home sales increased 28% in the second quarter of 2014 to $1.6 billion from $1.3 billion in the second quarter of 2013.
The rise in revenue accompanied a rise in the number of homes Lennar delivered -- from 4,449 homes in the second quarter of 2013 to the 4,976 it delivered this past quarter.
From the beginning of March to the end of May, the company also saw an 8% increase in the number of home orders, which is value at about $2 billion.
Lennar’s CEO, Stuart Miller, expressed satisfaction with the second-quarter numbers, which brought margins to record quarter highs for the home builder.
"Our core home-building business is hitting on all cylinders,” Miller said. “Fueled by a 14% increase in our average sales price and continued momentum from our land acquisition strategy, our gross and operating margins increased to 25.5% and 14.7%, respectively, the highest second-quarter margins in the Company's history."
The results from this quarter, according to Miller, were actually less than expected, but he said they’re indicative of a recovering market.
"While the spring selling season was softer than anticipated by us and the investor community, the home-building recovery continued its progression at a slow and steady pace,” Miller said. “The fundamentals of the home-building industry remain strong driven by high affordability levels, favorable monthly payment comparisons to rentals and overall supply shortages. Demand in most of our markets continues to outpace supply, which is constrained by limited land availability."
Lennar’s operating earnings also rose by 31% to $234.5 million.