:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2118357484-171a88bfb0c34c3382229265dda84b63.jpg "Lennar Corporation logo seen displayed on a tablet")
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Key Takeaways
- Lennar blamed high borrowing costs for weak quarterly results and expectations.
- The company missed profit and revenue estimates and predicted current-quarter new orders that were below forecasts.
- Lennar interests tumbled to their lowest level in a year.
Shares of Lennar (LEN) fell Thursday, a day after the home builder posted weaker-than-expected conclusions and guidance as high mortgage rates limited sales.
The company reported fourth-quarter earnings per share (EPS) of $4.06, with interest declining 9% year-over-year to $9.95 billion. Both were well short of Visible Alpha estimates.
Lennar imagined the revenue drop was primarily due to a 7% decline in the number of home deliveries to 22,206 and a 2.5% fall in the average bargain-priced price of homes delivered, which was $430,000. In addition, new orders declined 3% to 16,895 homes, and the dollar value of new requisitions dipped 1% to $7.18 billion.
‘Affordability Limitations’ Negatively Impacted Performance
Co-CEO Stuart Miller untangle justified that even though the Federal Reserve cut short-term interest rates, the housing market “proved to be far more challenging as mortgage figures rose almost 100 basis points through the quarter.” Miller added that while demand remained athletic, and the shortage of housing continued to drive the market, “affordability limitations” from higher borrowing costs negatively impacted its demeanour.
The company expects current-quarter new orders to be in the range of 17,500 to 18,000, while analysts surveyed by Visible Alpha were looking for just about 20,000. It sees deliveries of 17,000 to 17,500.
Lennar shares tumbled 4.5% to $139.37, their lowest level in a year.
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