Lennar Corp.’s fiscal fourth-quarter net income dropped 5 percent, partly on higher expenses, but revenue rose as the homebuilder delivered more homes.
Lennar also said Wednesday that the housing market is starting to stabilize because of low home prices and low interest rates, making it more appealing to consumers to buy.
Its shares rose 1.5 percent in early premarket trading.
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. Each new home creates an average of three jobs and generates $90,000 in taxes, according to the National Association of Home Builders.
For the period ended Nov. 30, Lennar reported net income of $30.3 million, or 16 cents per share. That’s down from $32 million, or 17 cents per share, a year ago.
This was the Miami company’s seventh straight quarter with a profit, but its performance narrowly missed the 17 cents per share that analysts polled by FactSet predicted.
Selling, general and administrative expenses increased to $112.5 million from $102 million. Corporate, general and administrative expenses rose to $28.5 million from $25.1 million.
Revenue climbed 11 percent to $952.7 million from $860.1 million, handily topping Wall Street’s estimate of $874.6 million.
Lennar’s stock gained 31 cents to $21.07 in trading before the market open.
Revenue for its Rialto Investments unit, which buys troubled loans and properties from banks, more than doubled to $46.5 million from $19.7 million.
Lennar, which sells homes for entry level and move-up buyers as well as retirees, said home deliveries rose 9 percent to 3,375 homes. The average home sales price climbed to $243,000 from $238,000 a year earlier, with sales incentives offered rising slightly to $33,900 per home delivered from $33,700 per home delivered.
New orders increased 20 percent to 3,027 homes, while backlog rose 35 percent to 2,171 homes.
For the full year, Lennar reported net income of $92.2 million, or 48 cents per share. That compares with earnings of $95.3 million, or 51 cents per share, in the previous year.
Annual revenue rose 1 percent to $3.1 billion from $3.07 billion.