Lennar Corp., the third-largest U.S. homebuilder by revenue, rose in New York trading after reporting a 20 percent jump in new orders for the fourth quarter from a year earlier.
Orders increased to 3,027 for the three months ended Nov. 30, the Miami-based company said in a statement today. The shares climbed 3.6 percent to $21.51 as of 11:20 a.m. after gaining as much as 5 percent.
“Each of the company’s operating segments was profitable despite challenging housing-market conditions, and its homebuilding operations performed slightly ahead of our expectations,” Vincent Foley, senior research analyst with Barclays Capital Inc. in New York, said in a note to investors.
U.S. housing starts climbed to a 19-month high and builder confidence rose for a third consecutive month in November. While there are signs that the market may be starting to improve, new homes sold at an annual pace of 315,000 in November, putting 2011 on pace to be the slowest year in Commerce Department records dating to 1963.
“As I look ahead to 2012, I’m cautiously optimistic that we’re seeing a real bottom form and we’re beginning to see a recovery,” Chief Executive Officer Stuart Miller said on a conference call today. “I feel that stabilization will emanate from the most desirable markets and spread slowly outward.”
Homebuilding Revenue
Revenue increased to $952.7 million from $860.1 million a year earlier. Homebuilding revenue rose 9.6 percent to $834 million and deliveries of homes to buyers increased 9 percent to 3,375.
Net income for the fourth quarter dropped to $30.3 million, or 16 cents a share, from $32 million, or 17 cents, a year earlier, according to the statement. Lennar was expected to earn 16 cents a share, the average estimate of 14 analysts surveyed by Bloomberg.
Lennar has been cutting costs and buying distressed real estate through Rialto Investments. The unit had operating earnings of $6 million in the fourth quarter compared with $25.1 million a year earlier. Rialto’s revenue climbed to $46.5 million from $19.7 million.
Gross margin on home sales, a measure of profitability, widened to 21.6 percent from 20.8 percent and average sales price rose 2 percent to $243,000, Lennar said.
Lennar is the largest U.S. homebuilder by revenue after PulteGroup Inc. and D.R. Horton Inc.
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