Lennar Corp. (NYSE: LEN) reported Q4 EPS of $2.13, $0.23 better than the analyst estimate of $1.90. Revenue for the quarter came in at $7 billion versus the consensus estimate of $6.63 billion.

2019 Fourth Quarter

• Net earnings of $674.3 million, or $2.13 per diluted share, compared to $796.1 million, or $2.42 per diluted share (Q4 2018 included $0.58 per diluted share related to gain on sale of Rialto investment and asset management platform, partially offset by non-recurring expenses)
• Deliveries of 16,420 homes – up 16%
• New orders of 13,089 homes – up 23%; new orders dollar value of $5.2 billion – up 23%
• Backlog of 15,577 homes – compared to 15,616 homes; backlog dollar value of $6.3 billion – down 4%
• Revenues of $7.0 billion – up 8%
• Homebuilding operating earnings of $892.5 million, compared to $806.7 million
  • Gross margin on home sales of 21.5%, compared to 21.4%
  • S,G&A expenses as a % of revenues from home sales improved to 7.6%, compared to 7.9%
  • Operating margin on home sales of 13.9%, compared to 13.5%
• Financial Services operating earnings (net of noncontrolling interests) of $81.2 million, compared to $57.6 million
• Multifamily operating earnings (net of noncontrolling interests) of $4.8 million, compared to $33.0 million
• Lennar Other operating earnings (net of noncontrolling interests) of $10.8 million, compared to loss of $48.5 million
• Homebuilding cash and cash equivalents of $1.2 billion
• Homebuilding debt to total capital of 32.8%
• Retired $600 million of homebuilding senior notes
• Repurchased 1.7 million shares for $98.2 million

Stuart Miller, Executive Chairman of Lennar, said, "Our fourth quarter showcased our company hitting on all cylinders as our operations continued to improve cash flows and returns. We made significant progress towards becoming a land lighter company by reducing our years owned supply of homesites to 4.1 years at year-end from 4.4 years at the end of the third quarter and increasing our controlled homesites as a percentage of our total homesites to 33% from 30% during the fourth quarter.

Mr. Miller continued, "New orders and deliveries for the quarter exceeded expectations by increasing 23% and 16%, respectively, over 2018, which contributed to a fourth quarter, bottom-line performance of $674.3 million, or $2.13 per diluted share, compared to $608.6 million, or $1.84 per diluted share year in the prior year (excluding the one-time gain from the sale of Rialto and non-recurring expenses). During fiscal 2019, we generated strong homebuilding cash flow of $1.6 billion as we retired $1.1 billion of senior notes and repurchased 9.8 million of our shares for $492.9 million.

Rick Beckwitt, Chief Executive Officer of Lennar, said, "During the fourth quarter, the basic underlying housing market fundamentals of low unemployment, higher wages and low inventory levels remained favorable. Against this backdrop, our homebuilding gross margin in the fourth quarter was 21.5%, while our focus on making our homebuilding platform more efficient resulted in an SG&A percentage of 7.6%, an all-time, fourth quarter low. In addition, our financial services business performed extremely well with fourth quarter earnings of $81.2 million, an all-time, quarterly high."

Jon Jaffe, President of Lennar, said, \"We remain focused on reducing our construction spend through direct cost savings, which contributed to a 110 basis point sequential improvement in our fourth quarter homebuilding gross margin percentage, while our cost per square foot for labor and materials remained relatively flat."

Mr. Miller concluded, "As we head into 2020, we expect our fiscal 2020 deliveries to be in the range of 54,000 - 55,000 homes, homebuilding gross margin percentage to be in the range of 20.5% - 21.0% and our cash flows to continue to accelerate as we continue to refine our overall land program. With only $600 million of senior notes due in 2020, we will opportunistically deploy excess cash flow to repurchase additional debt and return capital to shareholders."

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