* First-quarter earnings $0.26 per share vs est $0.15
* First-quarter revenue $989.9 mln vs est $898.4 mln
* New orders rise 34 pct
* Home sale closings up 28 pct
* Shares rise 5 percent
March 20 No. 3 U.S. homebuilder Lennar Corp
reported a first-quarter profit well above market
expectations as lower interest rates and rising rents encouraged
consumers to buy new homes, sending its shares up as much as 5
The housing market in the United States has been recovering
steadily after falling into a deep rut six years ago,
encouraging builders to undertake new projects.
Groundbreaking to build U.S. homes rose in February and new
permits for construction climbed to the highest level since
2008, a sign the housing market recovery is gathering steam.
Lennar President Rick Beckwitt said on a conference call
that the company was seeing a strong start to the spring selling
season, compared to the previous year.
The spring selling season is to homebuilders what Christmas
is to retailers. February is the first official month of the
spring selling season.
The company also said it has acquired enough land to meet
projected sales until 2014, and expects to spend about $500
million per quarter on new acquisitions focused on 2015 and
Low home inventories and fewer competing homebuilders have
created a supply crunch, driving up prices for new homes, the
Rival D.R. Horton Inc said in January that new home
inventory in the United States were at its lowest levels in five
or six years.
Lennar reported a 28 percent spike in home sale closings and
a 13 percent rise in average sale prices, pushing revenue up 37
percent to $989.9 million.
Backlog at the end of the quarter was worth $1.5 billion as
new orders rose 34 percent to 4,055 homes.
Lennar's net income rose nearly three-fold to $57.5 million,
or 26 cents per share, in the quarter ended Feb. 28, from $15
million, or 8 cents per share, a year earlier.
Analysts on average expected earnings of 15 cents per share
on revenue of $898.4 million, according to Thomson Reuters
Lennar said labor and material costs rose 4 percent in the
first-quarter. However, it said it expects rising home prices to
offset higher costs.
Lennar said earlier this year that it planned to venture
into the apartment rental market to take advantage of a supply
Miami-based Lennar's shares, which have more than doubled in
value since the beginning of 2012, were up 5 percent at $43.41
on Wednesday afternoon on the New York Stock Exchange.