Home builder Lennar grows margins to top earnings estimates

Yahoo Finance Live anchors discuss second-quarter earnings for Lennar.

影片文字轉錄稿

JULIE HYMAN: There is one more mover that we got to talk about this morning. And that's Lennar, which is, obviously, very interesting, given what we're seeing with the housing market. The company beating expectations in the latest quarter, reporting home deliveries as well above the high end of its guidance that it gave back in the beginning of the quarter. And the company announced gross margin of 29 and 1/2%, despite rising materials costs and rising wages. That 29 and 1/2%, by the way, up from 26.1% a year earlier. So one of these companies that's still managing to expand margins in this inflationary environment.

BRAD SMITH: Yeah, to put a number on those deliveries that you mentioned as well, increasing 14%, 16,549 homes in this most recent quarter. You also saw new orders increase 4%, 17,792 homes. And so that value of those new homes, that also increased 20%. So $9.1 billion are the figures that we're looking at for this most recent quarter and for the environment that Lennar still finds themselves in, too, as the Fed is raising rates, as you see mortgage applications perhaps start to pull back.

And we've already seen that start to show up in the data. Where do the values of these homes also begin to pull back as well? On what pricing strategy are they still going to have the confidence to not only go out to the market and say, all right, this is where we can deliver this home, but when you can deliver that home is still a major question as well. The number of parts that are necessary, of course, to put a house together, that places these homebuilders directly in the throes of the supply chain crunch as well.

JULIE HYMAN: There was a really telling quote from Stuart Miller, the executive chairman, in the release. He said, first of all, it was a complicated moment in the market-- yeah. But he also said they stuck to their forecast for deliveries for the full fiscal year. But he said current attempts at guidance are tantamount to guessing and not guiding, which I think tells you a lot about the predictability and the difficulties within the housing market right now.

BRAD SMITH: Spot on.