$LEN 2Q15 Call – Bruce, CFO: Gross profit on land sales $3.5MM vs. $5.6MM in the prior year. Equity in earnings from unconsolidated subs was $6.5MM. Other interest expense declined YoverY from $10.3MM in prior year to $3.8MM in current quarter. This quarter we opened 96 new communities to end the quarter with 667 active communities.
$LEN $LEN.B said the recently passed federal tax act has added additional momentum to the economic landscape. "While many has been concerned about the effects of the new tax law on housing with its mixed bag of impacts, initial readings and reviews suggest that it is generally stimulative to the economy," the company said.
Amidst a slow and steady housing recovery, $LEN reported 12% increase in its 4Q17 revenue to $3.79Bil, thanks to favorable interest rates and increased consumer confidence. However, net earnings witnessed a slight dip to $309.5MM, or $1.29 per share, as one of its key transactions got shifted to the upcoming quarter.
On $LEN's strategy for the future of its Financial Services, the company said it will maintain a fully sufficient financial services platform that benefits from Lennar homebuilding business, but drives profitability from retail operations as well.
$LEN $LEN.B, the second largest home-builder in the US, said its net income grew to $249.2MM, or $1.06 per share in 3Q17, compared to $235.8MM, or $1.01 per share a year ago. This was primarily driven by a 12% increase in deliveries at 3.6% higher cost. Revenue jumped 15% to $3.3Bil during the quarter.
Regarding the GM ramp in 2H17, $LEN said the ramp will be driven by the amount of field expenses that are absorbed, given the increased volume closings. Added to this, $LEN added that it enters the year with a bit lower sales pace and is able to push pricing throughout the year, which is a typical seasonal pattern.
On a segment basis, $LEN believes its for-sale core homebuilding operations continue to be well positioned for the remaining of 2017. In 2Q17, new orders were up about 12% YoY, driven by a higher sales pace of 4 homes per community per month compared to 3.9 a year ago, along with a community count growth of about 6%.
$LEN believes the business environment is positive and the governmental pro business improvement will result in job security and some tax reliefs. Looking forward into 2H17, the company expects each of its business segment to continue to grow.
$LEN's revenue from home sales for 2Q17 increased 18% to $2.9Bil from $2.4Bil in the previous year quarter. This was primarily due to a 15% growth in the number of home deliveries, excluding unconsolidated entities, and a 3% rise in the average sales price of homes delivered.
Homebuilder $LEN reported a decline in 2Q17 earnings due to higher costs and expenses. Net income fell to $213.6MM or $0.91 per share from $218.5MM or $0.95 per share last year. Revenue grew to $3.26Bil from $2.75Bil. The company is seeing more of a reversion to normal in housing market than slow and steady recovery pace.
$LEN is increasing its delivery goal to between 29,500-30,000 homes for 2017. On the SG&A line, the company expects continuing improvement in the SG&A line from operating leverage and investments in technology, reducing SG&A to between 9.1-9.3% for FY17.
