Lennar blows away earnings expectations
The housing market recovery gains steam as buyers are lured by record low interest rates.
Fourth-quarter profit at the Miami company surged some 310% to $124.3 million, or 56 cents per share, from $30.3 million, or 16 cents, a year earlier. Revenue surged 42% to $1.3 billion. Gross margins jumped 410 basis points to 23.5%. Analysts expected earnings of 44 cents on revenue of $1.31 billion. The company expects the good times to continue.
"Housing should continue to assume its traditional role in the broader economic recovery, driving employment upward, increasing consumer confidence and helping new homeowners accumulate wealth through home ownership, thus helping to accelerate economic growth," CEO Stuart Miller said in the earnings press release.
Lennar's earnings strength is the latest sign of housing's growing momentum. U.S. home prices surged 7.4% in November, their biggest year-over-year gain in more than 6 years, according to CoreLogic data cited by the Associated Press. Economists surveyed by Bloomberg News expect the confidence index from The National Association of Home Builders/Wells Fargo to hit its highest level since 2006. Its easy to see why. As the Washington Post noted, about 1.3 million homeowners are no longer underwater, meaning their homes are worth more than their mortgages.
According to Trulia.com, asking prices for homes rose 5.1% in December on a year-over-year basis. That's an improvement from the 4.3% decline seen in December 2011. The housing market with the biggest improvement was Las Vegas, which was one of the epicenters of the housing bubble, where prices surged 16.2% as out-of-state investors flocked to the area, as Vegas Inc. noted.
Still housing prices have not climbed back to their pre-recession levels and may not ever. My wife and I found this out first-hand recently when we refinanced our mortgage. The appraisal of our home came in much lower than what we expected. Still, we were pleased not to be underwater, a situation that some of our friends and relatives will be stuck in for a long time.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr. Updated at 11:48 AM to add CoreLogic data.
More on Money Now
- Why Americans are buying more TVs
- Did GM just unveil the best sports car ever?
- Smoking lounges disappearing from US airports
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices continue holding their recent levels with the Nasdaq Composite (+0.4%) and Russell 2000 (+0.4%) tied for the lead. In fact, high-growth names are showing relative strength for the second day in a row with the Nasdaq and Russell 2000 extending their week-to-date gains to 1.0% and 0.8%, respectively. Meanwhile, the Dow Jones Industrial Average remains flat for the week.
Interestingly, high-beta chipmakers have not taken part in the small-cap rally. The PHLX ... More
More Market News
Puma Biotechnology shares soar after it says it wants to file for marketing approval of an experimental breast cancer drug.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'