Lennar reported results for its third quarter ended August 31, 2021.
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Stuart Miller, Executive Chairman of Lennar, said, "During the third quarter, our company and the homebuilding industry as a whole continued to experience unprecedented supply chain challenges which we believe will continue into the foreseeable future.
"As a result, our third quarter deliveries of 15,199 homes were about 600 homes below the low end of our guidance. Additionally, we are adjusting our fourth quarter delivery guidance to, more or less, 18,000 homes, reflecting this supply chain constraint."
Mr. Miller continued, "Despite missing our delivery guidance, new home demand remains strong, even as the market reverts back to traditional seasonality.
"This is reflected in our 5% year over year sales growth and third quarter homebuilding gross margin of 27.3%, which was the highest quarterly percentage in the Company's history, and a 420 basis point improvement over the prior year.
"The improvement was driven by price appreciation as revenue per square foot increased 14% while cost per square foot only increased 8%.
"... our net margin was 20.3%, an all-time Company record, and was the primary driver of our third quarter net earnings of $1.0 billion, or $3.27 per diluted share, excluding mark to market gains on our public strategic technology investments."
"During the quarter, several of our strategic technology investments went public. Despite some of our investments currently trading at the lower end of their price ranges, they contributed about $500 million of mark to market gains during the quarter. This resulted in reported GAAP third quarter net earnings of $1.4 billion, or $4.52 per diluted share, compared to $666.4 million, or $2.12 per diluted share in the prior year."
"We ended the quarter with $2.6 billion in cash, no borrowings on our $2.5 billion revolver and a homebuilding debt to capital of 21.2%, an all-time Company low. Our land lighter model resulted in incremental cash flow generation during the third quarter which we used towards an early debt reduction of $300 million and the repurchase of about $250 million of our common stock. These transactions combined with our significant earnings contributed to a return on equity of over 20%." ■