Lennar Beats on Q1 Earnings, But Shares Dip 3% on Weak Margin Forecast

Lennar Corporation (NYSE:LEN) posted stronger-than-expected first-quarter results, but shares fell nearly 3% in pre-market today as investors reacted to a disappointing margin outlook for the current quarter.

For Q1, the homebuilder reported adjusted earnings per share of $2.14, outpacing analyst expectations of $1.75. Revenue climbed 5% year-over-year to $7.6 billion, also beating the $7.42 billion consensus estimate.

The company delivered 17,834 homes, marking a 6% increase from the prior year, while new orders rose 1% to 18,355 homes. However, the average sales price slipped 1% to $408,000, reflecting continued pricing pressure in the housing market.

Gross margin on home sales dropped to 18.7% from 21.8% a year ago, primarily due to higher land costs and declining revenue per square foot, partially offset by savings on construction expenses.

Looking ahead, Lennar expects to deliver between 19,500 and 20,500 homes in Q2, but projected a lower gross margin of approximately 18%, falling below the first quarter's level.

While the company’s top and bottom line performance exceeded expectations, the weaker margin guidance raised concerns about profitability trends heading into the spring selling season, weighing on investor sentiment despite solid operational results.