Lennar Corp.'s (LEN, LENB) fiscal second-quarter profit slid 65% as home deliveries fell and orders came in flat, though the homebuilder still exceeded expectations on both its top and bottom line.
The housing market has been a trouble spot in the U.S. economic recovery, as high supply and foreclosures have weighed on home prices. Sales of new homes have been particularly sluggish, remaining near record-low levels in April.
However, Lennar has helped itself by looking outside of home building. Its Rialto Investments business, which invests in distressed real estate, has been a driving force behind the Miami-based company's recent improved results.
For the quarter ended May 31, Lennar reported a profit of $13.8 million, or 7 cents a share, down from a $39.7 million, or 21 cents a share, a year ago. The year-earlier period included a 6 cents income-tax benefit.
Revenue came in 6.1% lower at $764.5 million. Revenue from home sales also fell 6.5%, to $648.8 million.
Analysts polled by Thomson Reuters most recently forecast earnings of 4 cents a share on $646 million in sales.
Gross margin on home sales fell to 19.4% from 20.6%.
Orders were flat with a year ago, at 3,204 homes. New home deliveries fell 7.9% to 2,682 homes, from 2,912 homes last year.
The company's backlog, an indication of future business, edged down 1%, while the cancellation rate was 17%.
Shares closed Wednesday at $18.10 and were inactive premarket. Year to date, the stock is down 3.5%.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; email@example.com