Lennar Corporation (NYSE: LEN) shares fell about 4% on Friday after the homebuilder reported third-quarter earnings below analyst expectations amid ongoing housing market pressures.
The company posted adjusted EPS of $2.00, missing the consensus estimate of $2.10. Revenue was $8.8 billion, short of forecasts of $8.97 billion.
Lennar delivered 21,584 homes during the quarter, nearly flat from 21,516 a year earlier. However, home sales revenue declined 9% year-over-year to $8.2 billion, reflecting a 9% drop in the average sales price to $383,000 from $422,000.
Gross margin on home sales fell to 17.5% from 22.5% a year earlier, while SG&A expenses increased to 8.2% of home sales, up from 6.7%.
Despite the margin pressures, new orders rose 12% to 23,004 homes, while the backlog stood at 16,953 homes valued at $6.6 billion.
For the fourth quarter, Lennar projected deliveries of 22,000 to 23,000 homes with an average price of $380,000 to $390,000 and gross margins of about 17.5%.
