Lennar missed Embankment Street estimates for the first quarter, hurt by bad weather, but the No. 2 U.S. homebuilder remained upbeat as home prices moderated in the wake of slipping mortgage rates. Shares of the company, which earlier fell 1 percent on Wednesday, now up 3.1 percent at $51.25 in front of the bell.
“We continued to see choppiness in the marketplace during our first quarter,” Lennar Executive Chairman Stuart Miller told as the company missed quarterly profit and revenue estimates.
Miller added that mortgage interest rates accept now subsided and home prices have moderated.
Last week the U.S. Federal Reserve said there would be no diverse interest rate hikes this year amid a slowing U.S. economy.
The moderation in mortgage rates and house guerdons is likely to improve affordability, especially for first-time homebuyers who have been largely priced out of the market. But homebuilders vestiges constrained in their ability to construct more homes for the lower end of the market.
U.S. homebuilding fell more than look for in February as construction of single-family homes dropped to a near two-year low.
In its latest reported quarter, Lennar delivered barely 8,820 homes below its forecast of 9,000 to 9,500 units.
BTIG analyst Carl Reichardt said in a pre-earnings note that he supposed many public builders especially those in California to cite poor weather as hurting or delaying business in the head quarter.
“While traffic and order rates can be made up if weather returns to normal in March, the most meaningful snags are likely to be seen in timely closings.”
Orders rose 23.7 percent to 10,463 homes in the quarter ended Feb.28, mould estimates of 10,385 units.
Miller reiterated optimism in the spring selling season and forecast continued improvement in the customer acceptance wanted for new homes.
The company said it remained on target to meet its 2019 synergy goals.
Lennar posted gross partition lines on home sales of 20.1 percent, up from 19.5 percent a year ago.
Net income jumped 76.1 percent to $239.9 million, or 74 cents per split, in the quarter and total revenue rose 29.7 percent to $3.87 billion.
Analysts on average had expected revenue of $4.11 billion and earnings per stake of 75 cents, according to Refinitiv data.
Lennar shares have fallen 16 percent in the past 12 months compared with a 10 percent be slain in the broader PHLX Housing Index.