Profit statements

More expensive lumber, supply chain issues weigh on Lennar’s bottom line; stocks collapse

Homes are seen at The Collection in Morristown, a Lennar Corporation subdivision, in Morristown, New Jersey, USA on November 13, 2021. REUTERS / Andrew Kelly

Register now for FREE and unlimited access to reuters.com

Register

Dec. 15 (Reuters) – Lennar Corp (LEN.N) missed quarterly profit estimates on Wednesday as supply chain problems linked to the pandemic pushed up lumber costs and delayed home deliveries , causing shares of the second-largest US maker to fall about 8% in extended trade.

Raw material and labor shortages have weighed on the operations of US homebuilders, forcing many to limit orders even as demand for new homes remains strong in a tight market.

Lennar’s backlog at the end of the fourth quarter grew to 23,771 from 18,821 a year ago.

Register now for FREE and unlimited access to reuters.com

Register

“Our cycle time has increased by approximately two weeks from the third quarter, due to rapidly evolving supply chain issues,” Co-Managing Director Jon Jaffe said in a statement.

Lennar’s orders, an indicator of future revenue, rose 2.1% to 15,539 units in the fourth quarter, while shipments rose to 17,819 units from 16,090 units.

The company plans to deliver around 67,000 homes in fiscal 2022, more than 59,825 delivered a year earlier. Its gross margin forecast of 27.0% to 27.5% on home sales for this period is, however, below 28.0% in the reported quarter.

Net income attributable to Lennar rose about 35% to $ 1.19 billion, or $ 3.91 per share, in the fourth quarter ended November 30. Analysts were expecting an average of $ 4.15 per share, according to data from Refinitiv.

Total revenue reached $ 8.43 billion, above Wall Street expectations.

Register now for FREE and unlimited access to reuters.com

Register

Report by Nathan Gomes in Bangalore; Edited by Ramakrishnan M.

Our standards: Thomson Reuters Trust Principles.