Boston, MA 09/18/2014 (wallstreetpr) – Homebuilder, Lennar Corporation (NYSE:LEN) disclosed that it could witness 14% growth in average sale price of its homes in the third quarter as sales incentive for home sales dipped to 5.8% from 6.0%. The recovery in the housing market, though slow and steady, has contributed to the uptick. However, it comes on the back of years of deficit in production.
Average Selling Price
Lennar Corporation (NYSE:LEN)’s overall average selling price or ASP of home grew 14% to $333,000 during the third quarter from $292,000 in the year-ago quarter, its statement disclosed. The company indicated that its Western area witnessed strongest uptick in ASP to $430000 from $366,000 representing an increase of 17.5% while Houston recorded a drop of 1.5% in ASP to $268,000 from $272,000 in the previous year quarter.
Lennar’s Central and East divisions witnessed 13% and 10.3% growth in ASP to $295,000 from $261,000 and $289,000 from $262,000 respectively in the earlier year quarter. Its Southern Florida recorded 8% uptick in ASP to $324,000 from $300,000 in the same quarter of 2013.
While the recovery in the housing sector contributed to a significant uptick in ASP, the lower incentive of 5.8% of home sales revenue compared to 6.0% in the prior year quarter also helped the company.
New Home Deliveries
Lennar Corporation (NYSE:LEN) said that its new home deliveries grew 9.4% to 5,457 homes in the third quarter from 4,990 homes driven by Southeast Florida by 24.8%, West by nearly 23%, Central by 14.5% and others by 13.5%.
While new orders jumped 23% to 5,889 homes, backlog increased 22% to 7,290 homes during the period under review. In dollar terms, this represented $1.9 billion and $2.5 billion respectively.
Lennar Corporation (NYSE:LEN) reported net earnings of $177.76 million for the third quarter, up 47.3% from $120.66 million while earnings jumped 44.4% to 78 cents a share from 54 cents a share in the year-ago quarter.
The company’s top line advanced 25.6% to $2.01 billion from $1.6 billion in the previous year quarter. Its gross margin improved by 30 basis points to 25.2% while its operating margin on home sales improved ten basis points to 14.8%.
The company’s Chief Executive Officer, Stuart Miller, said that its increased gross and operating margins along with sales backlog provides a solid foundation for next fiscal year.