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TAKEAWAYS KEY
- Shares of Lennar are falling in premarket trading Friday, as the home builder’s warning of a weak housing market offset better-than-estimated quarterly results.
- Co-Chief Executive Officer Stuart Miller said high interest rates and inflation, as well as declining consumer confidence and a limited supply of affordable homes are weighing on consumer's ability to access homeownership.
- Lennar’s shares have dropped by a quarter over the last 12 months, up to Thursday.
Shares of Lennar (LEN) are falling around 3% in premarket trading Friday, as the home builder’s warning of a weak housing market offset better-than-estimated quarterly results.
Co-Chief Executive Officer Stuart Miller said in a press release Thursday that a challenging "macroeconomic environment for homebuilding" weighed on the company in its fiscal first quarter. “While demand remains strong, persistently higher interest rates and inflation, combined with a downturn in consumer confidence and a limited supply of affordable homes, made it increasingly difficult for consumers to access homeownership," he said.
Miller said in general, net prices for homes, as well as rents in overbuilt apartment markets, have begun to drop as "demand remains constrained by affordability."
Miller said The company delivered 17,834 homes in the first quarter of the fiscal year and received new orders for 18,355. “Reflecting continued weakening in the market,” he said, the average price of a home after incentives fell by 1% to $408,000.
Lennar reported fiscal first quarter earnings (EPS) per share of $1.96, on revenue of $7.63 Billion, beating Visible Alpha’s estimates of $1.75 EPS and $7.48 Billion, respectively.
Lennar forecasted new orders of between 22,500 to 23,500, with an average price range of $390,000.
Lennar’s shares have dropped by a quarter over the last 12 months, up to Thursday.
