US homebuilder Lennar’s quarterly revenue beats estimates on higher sales

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(Reuters) -Lennar’s second-quarter revenue beat Wall Street estimates on Monday, as its incentives for home buyers lifted sales.

Shares of the U.S. homebuilder rose 2.3% after the bell.

Lennar has used mortgage rate buydowns, price cuts and cost adjustments to maintain its sales pace during the quarter, offsetting the impact of rising mortgage rates and economic uncertainty.

“As mortgage interest rates remained higher and consumer confidence continued to weaken, we drove volume with starts while incentivizing sales to enable affordability and help consumers to purchase homes,” said co-CEO Stuart Miller.

Lennar posted second quarter revenue of $8.38 billion, above analysts’ estimate of $8.16 billion, according to data compiled by LSEG.

However, its average sales price of $389,000 declined from $408,000 in the first quarter and was lower than $426,000 a year earlier, as affordability for home buyers remains an issue.

As a result, second quarter profit of $1.81 per share nearly halved from $3.45 a year earlier.

Lennar delivered 20,131 homes during the quarter ended May 31, above 19,690 units a year earlier, and in line with its own forecast of 19,500 to 20,500 homes.

The Miami, Florida-based company reported home sales gross margins of 18% in the second quarter, in line with its forecast. In the upcoming quarter, Lennar expects gross margin to remain at 18%.

The homebuilder expects to deliver 22,000 to 23,000 homes in the third quarter, compared with analysts’ average estimate of 23,174 homes.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Sahal Muhammed)