Florida-based Lennar Corp. – which is currently marketing seven new-home communities in Valencia and owns 15 percent of The Newhall Land and Farming Co. – posted first-quarter net earnings Tuesday of $15 million (8 cents per share).
That’s down from the prior first quarter’s total of $27.4 million (14 cents), but the year-ago figure is deceiving. It included a one-time gain of $37.5 million from the settlement of a lawsuit, which saved the company’s bacon year ago and kept it out of the red.
Better indicators of activity for the quarter ending Feb. 29 are operating profits of $20 million versus what would have been a $2 million loss without the litigation settlement – and operating revenues of $724.9 million, an increase of 30 percent.
Home deliveries also increased 29 percent on the year to 2,482, while there were 3,022 new home orders, up 33 percent. Deliveries and orders were higher in all geographic regions across the country.
“We were profitable in each of our business segments and recorded our strongest first quarter homebuilding operating margins in six years,” said CEO Stuart Miller.
The company’s gross profit margin increased to 20.9 percent from 20 percent in the first quarter of 2011.
“We have seen the market stabilize, driven by a combination of low home prices and low interest rates, making the decision to purchase a new home more attractive, compared to the heated rental market,” Miller said. “We have been able to increase sales prices and have started to reduce sales incentives in some of our communities. We have also seen a noticeable improvement in our sales pace per community, which should lead to a significant increase in the operating leverage of our homebuilding segment in the second half of the year.”