01—Abstract
Summary
Summary of the 8-K filed March 20, 2025. Cited figures are marked; the original filing is the authoritative source.
Lennar Corporation reported first-quarter results for the period ended February 28, 2025, in a press release furnished as Exhibit 99.1 to this Form 8-K.
Net earnings attributable to Lennar were $520 milliona, or $1.96 per diluted share, compared with $719 million, or $2.57 per diluted share, in the prior-year quarter. Excluding mark-to-market losses on technology investments, earnings were $567 million, or $2.14 per diluted share. Deliveries rose 6% to 17,834 homes and new orders rose 1% to 18,355 homes, while the dollar value of new orders fell 4% to $7.4 billion.
Total revenues were $7.6 billionb and homebuilding operating earnings were $809 million. The average sales price of homes delivered declined to $408,000, 1% lower than last year, and the gross margin on home sales was 18.7%, compared with 21.8% a year earlier. Management highlighted the completed spin-off of Millrose Properties, Inc. on February 7, 2025, which distributed approximately 80% of Millrose's stock to Lennar stockholders, and the acquisition of Rausch Coleman Homes' homebuilding operations on February 10, 2025.
The company reported $2.3 billionc of homebuilding cash and cash equivalents, no borrowings under its $3.0 billion revolving credit facility, and homebuilding debt to total capital of 8.9%. Lennar repurchased 5.2 million shares for $703 million during the quarter. Management said net home prices and rents in overbuilt apartment markets have started to decline as demand remains constrained by affordability.
For the second quarter of 2025, the company guided to new orders of 22,500 to 23,500 homes, deliveries of 19,500 to 20,500 homes, an average sales price of $390,000 to $400,000,d a gross margin on home sales of approximately 18%, and SG&A of 8.0% to 8.2% of home sales. Financial Services operating earnings are expected to be $135 million to $145 million.
02—Key points
Key Highlights
- Net earnings attributable to Lennar were $520 million, or $1.96 per diluted share, versus $719 million, or $2.57 per diluted share, a year earlier; excluding mark-to-market losses on technology investments, earnings were $2.14 per diluted share.
- Deliveries increased 6% to 17,834 homes, and new orders increased 1% to 18,355 homes, although the dollar value of new orders decreased 4% to $7.4 billion.
- Gross margin on home sales was 18.7% (18.8% before purchase accounting), compared with 21.8% in the prior-year quarter, and SG&A was 8.5% of home sales revenue, up from 8.2%.
- The average sales price of homes delivered was $408,000, 1% lower than last year, and backlog stood at 13,145 homes valued at $5.8 billion.
- Lennar completed the spin-off of Millrose Properties, Inc. on February 7, 2025, and the acquisition of Rausch Coleman Homes on February 10, 2025.
- The balance sheet remained strong, with $2.3 billion of homebuilding cash, no borrowings under the $3.0 billion revolver, and homebuilding debt to total capital of 8.9%.
- The company repurchased 5.2 million shares for $703 million and guided to second-quarter deliveries of 19,500 to 20,500 homes and a gross margin of approximately 18%.
03—Questions
Frequently Asked Questions
How did Lennar's first-quarter 2025 earnings compare with the prior year?
Net earnings attributable to Lennar were $520 million, or $1.96 per diluted share, compared with $719 million, or $2.57 per diluted share, in the first quarter of 2024. Excluding mark-to-market losses on technology investments, earnings were $567 million, or $2.14 per diluted share. The Lennar Other segment posted an operating loss of $89 million, primarily due to losses on technology investments.
Why did gross margins decline?
Gross margin on home sales was 18.7%, compared with 21.8% in the first quarter of 2024. The filing states that margins decreased due to higher land costs year over year and a decrease in revenue per square foot, partially offset by lower construction costs from the company's construction cost savings focus.
What is the Millrose spin-off and what does Lennar retain?
On February 7, 2025, Lennar completed the taxable spin-off of Millrose Properties, Inc. by distributing approximately 80% of Millrose's stock to its stockholders. Lennar will temporarily retain the remaining 20% without voting rights and expects to dispose of it through a later transaction. Lennar contributed $5.6 billion in land assets and $1.0 billion in cash to Millrose in connection with the spin-off.
What is the company's second-quarter 2025 outlook?
Lennar guided to new orders of 22,500 to 23,500 homes, deliveries of 19,500 to 20,500 homes, and an average sales price of $390,000 to $400,000. It expects a gross margin on home sales of approximately 18%, SG&A of 8.0% to 8.2% of home sales, and Financial Services operating earnings of $135 million to $145 million.
How much capital did Lennar return to shareholders and what is its liquidity position?
Lennar repurchased 5.2 million shares of common stock for $703 million at an average price of $134.40 during the quarter. At February 28, 2025, the company had $2.3 billion of homebuilding cash and cash equivalents and no outstanding borrowings under its $3.0 billion revolving credit facility, providing approximately $5.3 billion of available capacity.
04—Continue