Lennar Up after Earnings

Homebuilder Lennar Corporation (NYSE: LEN) shares closed up over 6% in trade despite posting weaker than expected fourth quarter earnings numbers. The Miami based homebuilder reported profits of $30.3 million, or 16 cents per share, compared with $32 million, or 17 cents per share, in the year-ago period. This was slightly below analyst estimates of 17 cents per share.

Revenues on the other hand came in much better than analyst forecasts.  Revenue rose 11% from year ago levels to $952.7 million. Analysts were only looking for $874.6 million in revenues. Additionally its home orders and backlog rose.

Stuart Miller, Chief Executive Officer of Lennar Corporation, said, “We are pleased to report EPS of $0.16 for our fourth fiscal quarter of 2011, making this our seventh consecutive quarter of profitability. Despite operating in a challenging real estate market, we achieved profitability in all of our business segments.”

“During the quarter, we continued to manage our homebuilding business carefully with tight controls over our costs and a focus on improving our gross margins. We benefited greatly from our strategic capital investments in new higher margin communities, which helped us produce a 21.6% gross margin, excluding valuation adjustments, in the fourth quarter.”

“On the Rialto side of our business, our first real estate fund successfully raised $700 million and is now contributing management fees and investment income to our bottom line results. We continue to see significant opportunities to invest in distressed assets for our Rialto business.”

Mr. Miller concluded, “Our balance sheet strength will allow us to capitalize on future opportunities as they present themselves, and we believe that our Homebuilding and Rialto segments are well positioned to lead the way to a third consecutive profitable year in 2012.”

Analysts were largely positive on the results. Lennar “is among the best-positioned builders, given management’s efforts to increase efficiency and lower costs through the downturn,” David Goldberg, a home-builder analyst with UBS, wrote in a client note. “Further, we believe Rialto provides protection should the broader market decline.”

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.