Lennar Corp (LEN) Q2 2024 Earnings: EPS and Revenue Beat Expectations with Strong Home Deliveries

Company Reports Higher Revenues and Increased Home Deliveries

  • Net Earnings: Increased 9% year-over-year to $954 million, or $3.45 per diluted share, up from $872 million, or $3.01 per diluted share in the prior year.
  • Revenue: Total revenues reached $8.8 billion, surpassing analyst estimates of $8.52 billion.
  • Home Deliveries: Increased 15% year-over-year to 19,690 homes, with new orders rising 19% to 21,293 homes.
  • Gross Margin: Gross margin on home sales improved slightly to 22.6%, up from 22.5% in the previous year.
  • Cash Position: Ended the quarter with $3.6 billion in homebuilding cash and cash equivalents, with no outstanding borrowings under the $2.2 billion revolving credit facility.
  • Share Repurchases: Repurchased 3.8 million shares of common stock for $603 million during the quarter.
  • Debt Reduction: Redeemed $454 million of 4.50% senior notes due April 2024 and repurchased $100 million of 4.75% senior notes due November 2027.
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On June 17, 2024, Lennar Corp (LEN, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust performance that surpassed analyst expectations. Lennar, one of the largest public homebuilders in the United States, targets first-time, move-up, and active adult homebuyers primarily under the Lennar brand name. The company also provides mortgage financing and related services through its financial-services segment.

Financial Highlights

For the second quarter of 2024, Lennar Corp reported net earnings of $954 million, or $3.45 per diluted share, a 15% increase from the $3.01 per diluted share reported in the same quarter last year. This performance exceeded the analyst estimate of $3.30 per share. Total revenues for the quarter reached $8.8 billion, surpassing the estimated $8.52 billion and reflecting a 9% increase from the prior year.


Operational Performance

Lennar's homebuilding segment saw significant growth, with new orders increasing by 19% to 21,293 homes and deliveries rising by 15% to 19,690 homes. The average sales price per home delivered was $426,000, a 5% decrease from the previous year, primarily due to increased use of incentives and product mix adjustments. Despite this, the gross margin on home sales improved slightly to 22.6%, up from 22.5% in the prior year, driven by cost-saving measures in construction.

Financial Services and Ancillary Businesses

The financial services segment reported operating earnings of $146 million, up from $112 million in the same quarter last year, benefiting from higher volumes and increased capture rates. However, the multifamily segment experienced an operating loss of $20 million, compared to an $8 million loss in the previous year. The Lennar Other segment also reported an increased operating loss of $28 million, primarily due to mark-to-market losses on technology investments.

Balance Sheet and Liquidity

As of May 31, 2024, Lennar Corp had $3.6 billion in homebuilding cash and cash equivalents and no outstanding borrowings under its $2.2 billion revolving credit facility, providing a total liquidity of $5.8 billion. The company also redeemed $454 million of its 4.50% senior notes due April 2024 and repurchased $100 million of its 4.75% senior notes due November 2027. Additionally, Lennar repurchased 3.8 million shares of its common stock for $603 million.

Key Metrics

Metric Q2 2024 Q2 2023
Net Earnings per Diluted Share $3.45 $3.01
Total Revenues $8.8 billion $8.0 billion
New Orders 21,293 homes 17,074 homes
Deliveries 19,690 homes 17,074 homes
Average Sales Price $426,000 $449,000

Commentary and Outlook

"We are pleased to report another strong quarter against the backdrop of evolving market conditions as interest rates rose for most of the quarter and then subsided as the quarter closed," said Stuart Miller, Executive Chairman and Co-Chief Executive Officer of Lennar.
"Driven by this quarter's strong operating performance, we constructively allocated capital while we continued to strengthen and fortify our balance sheet," added Jon Jaffe, Co-Chief Executive Officer and President of Lennar.

Looking ahead, Lennar Corp expects to deliver between 20,500 and 21,000 homes in the third quarter of 2024, with an average sales price ranging from $420,000 to $425,000 and a gross margin of approximately 23.0%. The company remains focused on its "land light" strategy and aims to deliver 80,000 homes for the full year.

For more detailed information, please refer to the full 8-K filing.

Explore the complete 8-K earnings release (here) from Lennar Corp for further details.