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Lennar 8-K Report, Financial Results (Sep 19, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed September 19, 2024
Period End
September 19, 2024
Securities
LENLEN-B
In the record · 2016–202610-K1210-Q338-K129

LEN filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 129 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Apr ’18Apr ’18
  2. Leadership change8-K · Nov ’20Nov ’20
  3. Leadership change8-K · Nov ’22Nov ’22
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed September 19, 2024. Cited figures are marked; the original filing is the authoritative source.

Lennar Corporation (NYSE: LEN and LEN.B) reported results for its third quarter ended August 31, 2024, in a press release furnished as Exhibit 99.1 to this Form 8-K dated September 19, 2024.

Net earnings attributable to Lennar were $1.2 billiona, or $4.26 per diluted share, compared with $1.1 billion, or $3.87 per diluted share, in the prior-year quarter. Excluding $39 million of mark-to-market gains on technology investments and $89 million of one-time items in the Multifamily segment, adjusted earnings were $1.1 billion, or $3.90 per diluted share. Total revenues were $9.4 billion, and the company delivered 21,516 homes, up from 18,559, while new orders rose to 20,587 homes from 19,666.

Margins were under pressure as the average sales price of homes delivered fell to $422,000b from $448,000, reflecting increased use of incentives. Gross margin on home sales was 22.5%, down from 24.4% a year earlier, though SG&A improved to 6.7% of home sales revenues from 7.0%. Homebuilding operating earnings were $1.5 billion, and the Multifamily segment benefited from a $179 million one-time net gain on asset sales from LMV Fund I, partly offset by a $90 million write-down of non-core assets.

The balance sheet remained strong, with $4.0 billionc of Homebuilding cash and cash equivalents, no borrowings under the $2.2 billion revolving credit facility, and Homebuilding debt to total capital of 7.6%, down from 11.5% a year earlier. The company repurchased 3.4 million shares for $519 million and reported a 1.1 year supply of owned homesites, with 81% of homesites controlled. For the fourth quarter, Lennar guided to 22,500 to 23,000 deliveries, new orders of 19,000 to 19,300, an average sales price of about $425,000, and gross margin flat with the third quarter.

02—Key points

Key Highlights

  1. Diluted EPS of $4.26 rose 10% from $3.87 a year earlier; excluding mark-to-market gains and one-time Multifamily items, EPS was $3.90.
  2. Deliveries rose 16% to 21,516 homes and new orders rose 5% to 20,587 homes.
  3. Average sales price fell to $422,000 from $448,000, driven by increased sales incentives and product mix.
  4. Gross margin on home sales declined to 22.5% from 24.4%, while SG&A improved to 6.7% of home sales revenues from 7.0%.
  5. Homebuilding debt to total capital fell to 7.6% from 11.5% a year earlier, with no outstanding revolver borrowings and $4.0 billion of Homebuilding cash.
  6. Lennar repurchased 3.4 million shares for $519 million during the quarter.
  7. Fourth-quarter guidance calls for 22,500 to 23,000 deliveries, 19,000 to 19,300 new orders, and an average sales price of about $425,000.

03—Questions

Frequently Asked Questions

  1. How did Lennar perform in the third quarter of 2024?

    Lennar reported net earnings attributable to Lennar of $1.2 billion, or $4.26 per diluted share, versus $1.1 billion, or $3.87 per diluted share, a year earlier. Total revenues were $9.4 billion, and the results included $39 million of mark-to-market gains on technology investments and $89 million of one-time items in the Multifamily segment.

  2. Why did the average sales price decline?

    The average sales price of homes delivered fell to $422,000 from $448,000. The filing attributes this primarily to pricing to market through increased use of incentives and product mix.

  3. What drove the change in gross margin?

    Gross margin on home sales fell to 22.5% from 24.4%. The company cited lower revenues per square foot and higher land costs, partially offset by lower material costs and construction cost savings.

  4. How strong is Lennar's balance sheet?

    At August 31, 2024, Homebuilding cash and cash equivalents were $4.0 billion, with no borrowings under the $2.2 billion revolving credit facility and approximately $6.2 billion of available liquidity. Homebuilding debt to total capital was 7.6%, compared with 11.5% at August 31, 2023.

  5. What is the outlook for the fourth quarter of 2024?

    Lennar expects to deliver 22,500 to 23,000 homes and to achieve 19,000 to 19,300 new orders, with an average sales price of about $425,000. It expects gross margin on home sales flat with the third quarter, SG&A of 6.7% to 6.8% of home sales, and Financial Services operating earnings of $140 million.

04—Continue

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