Lennar Reports Earnings Miss and Weak Outlook, Shares Drop 8%

Lennar (NYSE:LEN) witnessed a sharp decline in its stock after delivering a disappointing fourth-quarter performance and issuing a subdued forecast for the upcoming quarter. The company’s shares tumbled over 8% in pre-market today as it grappled with the effects of higher mortgage rates on homebuyer demand.

For the quarter, Lennar reported adjusted earnings per share of $4.03, falling short of market expectations of $4.20. Revenue rose 8% year-over-year to $9.95 billion but still missed projections of $10.06 billion. The homebuilder delivered 22,206 homes during the period, with an average sales price of $430,000, a slight decline compared to the prior year.

However, the most significant setback came from weaker-than-expected new home orders, which totaled 16,895—well below the company’s guidance of at least 19,000. Rising interest rates eroded affordability, further cooling demand and slowing the pace of sales.

Looking ahead, Lennar’s outlook for the first quarter reflected continued challenges. The company anticipates delivering 17,000 to 17,500 homes at a reduced average sales price of $410,000 to $415,000. Margins are also expected to compress, with gross margin on home sales forecasted between 19.0% and 19.25%, down from 22.1% in the prior quarter.