Lennar Corp. (LEN) Tops Q1 EPS by 43c, Revenues Beat

Lennar Corp. (NYSE: LEN) reported Q1 EPS of $1.27, $0.43 better than the analyst estimate of $0.84. Revenue for the quarter came in at $4.5 billion versus the consensus estimate of $4.16 billion.

• Net earnings of $398.5 million, or $1.27 per diluted share, compared to net earnings of $239.9 million, or $0.74 per diluted share
• Deliveries of 10,321 homes – up 17%
• New orders of 12,376 homes – up 18%; new orders dollar value of $5.0 billion – up 20%
• Backlog of 17,632 homes – up 2%; backlog dollar value of $7.2 billion – up 1%
• Revenues of $4.5 billion – up 16%
• Homebuilding operating margins of $474.3 million, compared to $384.9 million
  • Gross margin on home sales of 20.5%, compared to 20.1%
  • S,G&A expenses as a % of revenues from home sales of 9.2%, compared to 9.5%
  • Operating margin on home sales of 11.4%, compared to 10.6%
• Financial Services operating earnings (net of noncontrolling interests) of $58.2 million, compared to $21.8 million
• Multifamily operating earnings (net of noncontrolling interests) of $1.7 million, compared to operating earnings of $6.8 million
• Lennar Other operating earnings (net of noncontrolling interests) of $0.9 million, compared to $3.0 million
• Homebuilding cash and cash equivalents of $785 million
• Homebuilding debt to total capital of 33.6%
• Borrowings of $300 million under the Company's $2.4 billion revolving credit facility
• Repurchased 4.4 million shares for $288.4 million

Stuart Miller, Executive Chairman of Lennar, said, "Although today we are announcing our first quarter 2020 results, the events that have occurred since quarter-end currently command our focus and attention. With a near shutdown of large portions of our national economy, we are all stretching our minds to understand the parameters of the rapidly evolving landscape, while we contemplate what the future holds. Accordingly, our first quarter conference call this morning will be focused on Lennar's oversight and management through the current crisis, and the steady-handed approach that we have applied."

Mr. Miller continued, "First and foremost, our senior management team is evaluating every aspect of our company to determine how we protect the safety, health and hygiene of each and every one of our associates, customers and building partners, while we maintain our business. In that regard, we have engaged a distinguished medical professional, Dr. Pascal Goldschmidt, as our Chief Medical Officer who is assisting us in looking into every step of every business process to ensure we fully understand its impact on the health of every individual involved.

"Next, with safety, health and hygiene first, we are focused on the day to day operation of maintaining the parts of our business that are sustainable, while the national economy is struggling with a deepening pause, in order to \'flatten the COVID-19 curve.\' Like food from the grocer is essential, our customers need a safe and secure place called 'home,' while the country moves from today's landscape of uncertainty to knowing that 'this too, shall pass. Balancing people, safety and pause, with production and closings is difficult, and has the undivided focus of our entire seasoned and experienced management team.

"Third, we are managing every element of our balance sheet, cash management and cash flow. We are managing the inflow, and especially the outflow, of cash to maintain a strong foundation. Lennar\'s liquidity and strong balance sheet remain a stabilizing factor in enabling our company to help absorb the shock that is moving through the economy at this time. We are well positioned for stability today, as well as for opportunity when markets settle.

Mr. Miller concluded, "As you can see in the schedules in our earnings release, our first quarter results achieved and exceeded all expected metrics and we had been on track to expand on our guidance for the year. We have been focused on reducing land spend and land holdings to grow cash flow and fortify our balance sheet. That strategy was well-timed and has positioned us well. In the context of today's widespread shutdowns, we are choosing to suspend guidance as the world resets and finds its way forward. In the meantime, the laser focus of our experienced, hands-on management team will navigate, make necessary adjustments and guide Lennar through current market conditions."

For earnings history and earnings-related data on Lennar Corp. (LEN) click here.

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