Lennar Corporation reported results for its first quarter ended February 28, 2015. First quarter net earnings attributable to Lennar in 2015 were $115 million, or $0.50 per diluted share.
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This compares to first quarter net earnings attributable to Lennar in 2014 of $78.1 million, or $0.35 per diluted share.
Revenues from home sales increased 23% in the first quarter of 2015 to $1.4 billion from $1.1 billion in the first quarter of 2014. Revenues were higher primarily due to a 20% increase in the number of home deliveries, excluding unconsolidated entities, and a 3% increase in the average sales price of homes delivered.
New home deliveries, excluding unconsolidated entities, increased to 4,301 homes in the first quarter of 2015 from 3,597 homes in the first quarter of 2014. There was an increase in home deliveries in all of the Company's Homebuilding segments and Homebuilding Other. The average sales price of homes delivered increased to $326,000 in the first quarter of 2015 from $316,000 in the first quarter of 2014.
Sales incentives offered to homebuyers were $21,800 per home delivered in the first quarter of 2015, or 6.3% as a percentage of home sales revenue, compared to $21,300 per home delivered in the first quarter of 2014, or 6.3% as a percentage of home sales revenue, and $23,100 per home delivered in the fourth quarter of 2014, or 6.6% as a percentage of home sales revenue.
Gross margins on home sales were $324.8 million, or 23.1%, in the first quarter of 2015, compared to $286.1 million, or 25.1%, in the first quarter of 2014. Gross margin percentage on home sales decreased compared to the first quarter of 2014, primarily due to an increase in materials, labor and land costs, partially offset by an increase in the average sales price of homes delivered.
In addition, gross margin on home sales in the first quarter of 2014 included a $5.5 million insurance recovery, which represented 50 basis points in that period.
Gross profits on land sales totaled $12.1 million in the first quarter of 2015, compared to $16.1 million in the first quarter of 2014.
Selling, general and administrative expenses were $160.4 million in the first quarter of 2015, compared to $135.1 million in the first quarter of 2014. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 11.4% in the first quarter of 2015, from 11.8% in the first quarter of 2014 due to improved operating leverage as a result of an increase in home deliveries as well as a 30 basis point reduction due to a decrease in insurance reserves.
Lennar Homebuilding equity in earnings from unconsolidated entities was $28.9 million in the first quarter of 2015, compared to $5.0 million in the first quarter of 2014.
In the first quarter of 2015, Lennar Homebuilding equity in earnings from unconsolidated entities included $31.3 million primarily related to sales of approximately 600 homesites to third parties by El Toro, one of the Company's unconsolidated entities, partially offset by the Company's share of operating losses of various Lennar Homebuilding unconsolidated entities.
In the first quarter of 2014, Lennar Homebuilding equity in earnings from unconsolidated entities included $4.5 million primarily related to a third-party land sale by one of the Company's unconsolidated entities.
Lennar Homebuilding other income, net, totaled $6.3 million in the first quarter of 2015, compared to $2.9 million in the first quarter of 2014. In the first quarter of 2015, other income, net included a $6.5 million gain on the sale of an operating property.
Lennar Homebuilding interest expense was $38 million in the first quarter of 2015 ($33.5 million was included in cost of homes sold, $0.4 million in cost of land sold and $4.1 million in other interest expense), compared to $41.0 million in the first quarter of 2014 ($26.4 million was included in cost of homes sold, $1.8 million in cost of land sold and $12.7 million in other interest expense).
Interest expense decreased primarily due to an increase in qualifying assets eligible for interest capitalization, partially offset by an increase in the Company's outstanding debt and an increase in home deliveries. ■