Lennar Corp., the biggest U.S. home builder by stock-market value, reported a quarterly profit that beat analysts estimates as the company raised its prices and delivered more properties.
Net income for the three months through May was $137.7 million, or 61 cents a share, little changed from a year earlier, the Miami-based company said in a statement today. The average of 14 analysts’ estimates was for earnings of 52 cents a share, according to data compiled by Bloomberg. Revenue jumped 27% to $1.8 billion.
“The homebuilding recovery continued its progression at a slow and steady pace,” Chief Executive Officer Stuart Miller said in the statement.
U.S. new-home sales surged to an annualized pace of 504,000 in May, the highest level in six years, as the market recovered from a weather-induced slowdown in the first quarter and consumer confidence improved, the Commerce Department reported this week. Publicly traded builders including Lennar have been increasing prices to take advantage of a tight supply of new and existing homes while using their economies of scale to reduce costs and widen profit margins.
Lennar’s orders in the fiscal second quarter climbed to 6,183 units worth $2 billion, an 8% increase in volume and a 21% gain in value.
U.S. home sales started slowing in May 2013 after mortgage rates jumped a percentage point. Lennar’s orders were less than some analysts expected, “indicating core buying demand was relatively flat compared to last year’s spring selling season,” Adam Rudiger, an analyst at Wells Fargo & Co., wrote in a note today from Boston.
The number of houses delivered by Lennar in the quarter increased 12% from a year earlier to 4,987. The average sale price rose to $322,000 from $283,000.
Lennar’s year-earlier results included a one-time tax allowance that added $41.3 million, or 18 cents a share, to its earnings for the period.
The company builds homes for first-time and move-up buyers, retirees and multiple-generation households in 18 states. It also invests in apartments, master-planned communities, mortgage financing and commercial real estate.
Lennar rose 0.3% to $41.65 at 11:03 a.m. in New York. The shares gained 5% this year through yesterday, compared with a 1.2% advance for the Standard & Poor’s Supercomposite Homebuilding Index.