LENB Lennar Corporation (Class B)

By Allison Prang and Bowdeya Tweh 

Lennar Corp. said strong demand for new homes and higher selling prices drove earnings growth in the most recent quarter, as the nation's largest home builder reported it has so far shaken off concerns about rising interest rates and construction costs.

Lennar said its backlog nearly doubled from a year ago to 19,622, reflecting the more than 6,000 homes acquired as part of its purchase of CalAtlantic. The average sales price for new orders rose 11% to $418,000 in the three-month period ended May 31.

Lennar Executive Chairman Stuart Miller said in prepared remarks Tuesday the company's results reflect "continued solid fundamentals in the housing market."

"Concerns about rising interest rates and construction costs have been offset by low unemployment and increasing wages, combined with short supply based on years of underproduction of new homes," he said.

Shares of Lennar rose 7.7% in morning trading. Fellow home builders D.R. Horton Inc., PulteGroup Inc. and NVR Inc. also showed gains Tuesday.

Lennar's results come after federal data released Monday showed an increase in sales of new homes for the month of May. The Commerce Department said purchases of newly built single-family homes rose 6.7% from a month earlier, or 14.1% from a year ago. Sales of existing homes, however, declined last month.

Lennar's second-quarter profit rose 45% to $310.3 million, or 94 cents a share. Excluding costs related to the acquisition and other items, the company made $1.58 a share, beating estimates of 45 cents a share from analysts polled by Thomson Reuters.

Write to Allison Prang at allison.prang@wsj.com and Bowdeya Tweh at Bowdeya.Tweh@wsj.com

(END) Dow Jones Newswires

June 26, 2018 11:28 ET (15:28 GMT)

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