* Fourth-quarter revenue rises 42 pct to $1.92 bln
* Earnings $0.73/share vs $0.56 a year earlier
* Average selling price jumps 18 pct to $307,000
* Gross margin improves 330 basis points
* Shares rise as much as 5 pct
(Adds CEO quote, analysts' comments; updates shares)
By Sagarika Jaisinghani
Dec 18 Lennar Corp, the No.3 U.S.
homebuilder, reported a 13 percent jump in quarterly orders and
the second-highest gross margins in its 59-year history, defying
a recent slowdown in the U.S. housing market that hurt its
Housing demand, which stayed strong through 2012, slackened
this summer as mortgage rates increased due to concerns over a
cutback in the U.S. Federal Reserve's bond buying program.
While interest rates have dropped from a two-year high in
July, investors will be closely watching the Fed's last policy
announcement of the year later on Wednesday.
Lennar shares and those of its peers rose in morning trade
after Commerce Department data showed that U.S. housing starts
in November had surged to their highest level in nearly six
"The housing market remains on track for a solid recovery,"
Lennar Chief Executive Stuart Miller said on a post-earnings
The company is better positioned than most peers to maintain
its homebuilding pace even in a slowdown, since it bought land
in high-demand areas through the downturn. This allows it to
raise prices now that there is a shortage of developed lots.
"They're best in class," Williams Financial Group analyst
David Williams said. "These guys are doing everything that needs
to be done and they're able to drive gross margins higher even
in the face of rising costs."
Lennar's decision to offer apartment rentals - commonly
called the "multi-family" business - has also put it ahead of
its two bigger peers, D.R. Horton Inc and PulteGroup Inc
, to weather a further possible slowing in U.S. housing
recovery next year.
The company said on Wednesday it leased one apartment
community with 11 more under construction at the end of the
"Multi-family could be a huge driver for (Lennar's) earnings
growth next year that I don't think has been factored into
shares yet," Williams said.
RISING SELLING PRICES
Lennar said that its average selling price rose 18 percent
to $307,000 in the fourth quarter ended Nov. 30.
The jump indicates that "demand is still strong enough to
allow Lennar to maintain its recent price increases during a
volatile political and rising interest rate environment,"
Raymond James analyst Buck Horne wrote in a note to clients.
D.R. Horton, the No.1 homebuilder, has not been able to
raise its prices as much due to its lower presence in areas
close to the city centers, where demand is currently high.
In November, D.R. Horton reported an average sales price of
$261,400 for its fiscal 2013 ended Sept. 30.
D.R. Horton and No.2 PulteGroup also reported a drop in
orders in their most recent quarters.
Lennar's orders increased to 4,498 homes from 3,983 in the
fourth quarter of 2012. Orders are a key indicator for builders,
who do not book revenue until they close on a house.
Net income attributable to Lennar rose to $164.1 million, or
73 cents per share, in the quarter ended Nov. 30, from $124.3
million, or 56 cents per share, a year earlier.
Gross margins increased 330 basis points to 26.8 percent.
Total revenue jumped 42 percent to $1.92 billion.
Lennar shares were up 2.4 percent at $36.05 on the New York
Stock Exchange. The Dow Jones Home Construction Index was up 2
(Reporting by Sagarika Jaisinghani in Bangalore; Editing by