MIAMI (AP) — A rise in new orders and the number of homes delivered gave Lennar a boost as its net income more than quadrupled in the third quarter in part because of a tax benefit.
The homebuilder also reported a significant increase in backlog, a sign of potential future housing revenue.
Echoing sentiments similar to those expressed by KB Home on Friday, Lennar CEO Stuart Miller said in a statement on Monday that housing recovery is underway.
Lennar shares fell 63 cents. or 1.7 percent, to $36.88 in morning trading after rising as high as $38.27 earlier in the session, their highest level since June 2007. They are still about triple their low of $12.14 set in early October 2011.
Homebuilders are a bellwether for the housing market and the economy. While new homes represent less than one-fifth of the total housing market, construction of houses has a major impact on the economy.
Part of the reason consumers are getting back into the housing market is because of historically low rates. On Thursday mortgage buyer Freddie Mac said that the average rate on the 30-year loan declined to 3.49 percent from 3.55 percent last week. That matched the lowest rate since long-term mortgages began in the 1950s.
The average on the 15-year fixed mortgage, a popular refinancing option, plunged to 2.77 percent, a record low.
Earlier in the month the Federal Reserve announced that it plans to spend $40 billion a month to buy mortgage bonds for as long as it thinks necessary to make home buying more affordable.
Lennar Corp., which sells homes for entry level and move-up buyers as well as retirees, earned $87.1 million, or 40 cents per share, for the three months ended Aug. 31, up sharply from $20.7 million, or 11 cents per share, a year ago.
The current quarter included a tax benefit of $12.8 million.
Analysts surveyed by FactSet expected earnings of 28 cents per share. The estimates typically exclude one-time items.
Revenue improved to $1.1 billion from $820.2 million as revenue from home sales increased 33 percent. Wall Street analysts forecast $1.02 billion.
Lennar said that home deliveries climbed 28 percent to 3,655 homes, while new orders rose 44 percent to 4,198 homes.
Backlog for the Miami company increased 79 percent to 4,513 homes.
On Friday KB Home reported that it returned to a third-quarter profit thanks partly to a tax benefit as net orders and home deliveries climbed.