Here are some comments from the executive chairman of Lennar after reporting their Q1 results after the close last night.
The housing market is still hot and Lennar, one of the nation’s largest home builders, is reaping the rewards.
“Our first quarter results benefited from continued robust market conditions, combined with the exceptional performance of our core homebuilding and financial services businesses,” executive chairman Stuart Miller said in a release Tuesday after the closing bell.
The company benefited from higher gross margins on home sales in the quarter. Lennar’s margins rose nearly 5 percentage points, from 20.5% in the same quarter last year to 25% in the first quarter of 2021. Miller said the company’s strategy of aligning sales with deliveries and accounting for materials costs in pricing was behind the increase.
The home builder’s deliveries also improved. Lennar said it delivered 12,314 homes in the first quarter, up from 10,321 the same quarter last year, but slightly below the consensus of 12,480.
Despite a recent uptick in interest rates, Miller said that “the housing market remains very strong across the country.” The company expects a gross margin on home sales of 25% for fiscal year 2021, an increase from 22.8% in 2020 and 20.6% in 2019, according to FactSet. Lennar expects deliveries between 62,000 and 64,000, greater than the 52,925 homes delivered last year and the 51,491 delivered the year before.
“With an excellent balance sheet and continued execution of our core operating strategies, we are extremely well positioned for an even stronger 2021 as the year progresses,” Miller said in the release.
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Deliveries of 12,314 homes – up 19%
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New orders of 15,570 homes – up 26%; new orders dollar value of $6.5 billion – up 31%
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Backlog of 22,077 homes – up 25%; backlog dollar value of $9.5 billion – up 32%