Lennar (LEN) Q3 2024 earnings summary

Executive summary

• Net earnings rose to $1.16 billion ($4.26 per diluted share) in Q3 2024, with adjusted EPS at $3.90, and revenues increased 8% to $9.42 billion, driven by a 16% rise in home deliveries despite a 6% decrease in average sales price.

• The company is nearing completion of its five-year transformation to an asset-light, land-light model, focusing on just-in-time home site delivery and improved operating efficiencies.

• Announced the planned spin-off of Millrose Properties, a REIT to acquire and develop land, with $6–$8 billion in land and cash to be contributed, supporting the asset-light strategy.

• The company remains focused on volume growth, operational efficiency, and capital returns to shareholders through dividends and stock buybacks.

• Backlog at quarter-end was 16,944 homes valued at $7.7 billion.

Financial highlights

• Q3 2024 home deliveries increased 16% to 21,516; new orders rose 5% to 20,600; revenues reached $9.42 billion, up from $8.73 billion.

• Gross margin for Q3 was 22.5%, with net margin at 15.8%; EPS excluding one-time items was $3.90.

• Ended the quarter with $4.0–$4.3 billion in cash and a 7.6% debt-to-total capital ratio.

• Inventory churn improved to 1.6x from 1.4x last year; return on inventory reached 31.3%, up over 320 basis points year-over-year.

• Repurchased 3.4 million shares for $519 million and paid $136 million in dividends in Q3.

Outlook and guidance

• Q4 2024 guidance: 22,500–23,000 home deliveries, flat gross margin with Q3, and EPS of $4.10–$4.25.

• Full-year 2024 deliveries expected between 80,500 and 81,000 homes, a 10% increase over 2023.

• Community count expected to exceed 1,400 by year-end 2024; 10% growth in deliveries anticipated to continue into 2025.

• Targeting over $2 billion in share repurchases for fiscal 2024.

• Financial Services operating earnings projected at $140 million for Q4.