(Corrects first bullet to say "second quarter", not first)
* Second-quarter profit $0.61/share vs est $0.51
* Average selling price rises 14 pct to $322,000
* Orders rise 8 pct
By Mridhula Raghavan
June 26 Lennar Corp, the second-largest
U.S. homebuilder, reported a better-than-expected quarterly
profit as it sold more homes at higher prices.
Lennar has been able to raise prices despite a choppy
recovery in the U.S. housing market as it mainly caters to
buyers looking for a second home who are more comfortable with
volatile interest rates.
The company said average selling price rose 14 percent to
$322,000 in the quarter ended May 31 amid tighter supply.
Lennar handed over 4,987 homes, a jump of 12 percent from a
Gross margins on home sales improved to 25.5 percent as the
company benefited from buying land during the downturn unlike
most other homebuilders. Gross margins were 24.1 percent a year
Lennar did not have to use "greater incentives" to get
sales, ISI Group analyst Steve East said. "We were worried the
industry would start to move towards (that)."
But order growth for the company slowed to 8 percent, its
first single-digit quarterly increase in three years, largely
due to weak demand in the all-important spring selling season.
Chief Executive Stuart Miller on Thursday termed the spring
selling season as softer-than-expected, but said demand would
continue to outpace supply due to limited availability of land.
Orders rose to 6,183 houses in the quarter ended May 31.
Lennar, which entered the apartment rental business last
year, said it expects to sell its first apartment community in
the current quarter ending August.
Net income was flat at $137.7 million, or 61 cents per
share, but came in above the average analyst estimate of 51
cents, according to Thomson Reuters I/B/E/S.
Lennar's profit was weighed down by losses in its real
estate financing business and multi-family home business.
Revenue rose 28 percent to $1.82 billion.
Lennar shares were flat at $41.76 in afternoon trading on
the New York Stock Exchange.
(Reporting by Mridhula Raghavan in Bangalore; Editing by Sriraj