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Investing.com -- Lennar Corporation (NYSE:LEN) reported better-than-expected first quarter earnings and revenue, but shares fell 3% as the homebuilder’s second quarter margin guidance came in below expectations.
The company posted adjusted earnings per share of $2.14 for the quarter ended February 28, beating analyst estimates of $1.75. Revenue rose 5% year-over-year to $7.6 billion, surpassing the consensus forecast of $7.42 billion.
Lennar delivered 17,834 homes in Q1, up 6% from the prior year, while new orders increased 1% to 18,355 homes. However, the average sales price declined 1% to $408,000 due to continued market weakness.
Gross margin on home sales fell to 18.7% from 21.8% a year ago, which the company attributed to higher land costs and lower revenue per square foot, partially offset by construction cost savings.
For Q2, Lennar expects to deliver between 19,500 to 20,500 homes with a gross margin of approximately 18%, below the 18.7% reported in Q1. The softer margin outlook likely contributed to the stock’s decline.
"Despite an uncertain macro environment, we are optimistic about our business and remain focused on our mission of building a healthier housing market and bringing attainable homes to more people," said Executive Chairman Stuart Miller.
Lennar repurchased 5.2 million shares for $703 million during the quarter. The company also completed the spin-off of its land assets into Millrose Properties and acquired homebuilder Rausch Coleman Homes.