Lennar Reports Third Quarter 2025 Results

Core Insights - Lennar Corporation reported a significant decline in net earnings for Q3 2025, with net earnings of $591 million or $2.29 per diluted share, down from $1.2 billion or $4.26 per diluted share in Q3 2024 [2][4]. - The company delivered 21,584 homes and recorded 23,004 new orders, reflecting a 12% increase in new orders compared to the previous year [3][4]. - The average sales price of homes decreased to $383,000 in Q3 2025 from $422,000 in Q3 2024, primarily due to market weakness [6][7]. Financial Performance - Total revenues for Q3 2025 were $8.8 billion, down 9% from $9.4 billion in Q3 2024, mainly due to a decrease in home sales revenue [4][6]. - Homebuilding operating earnings were $760 million, with a gross margin of 17.5%, down from 22.5% in the prior year [4][7]. - Selling, general and administrative (SG&A) expenses increased to $676 million, representing 8.2% of revenues, up from 6.7% in Q3 2024 [8]. Operational Highlights - The company ended the quarter with a backlog of 16,953 homes valued at $6.6 billion [4][31]. - Inventory turns improved to 1.9 times, and cycle time decreased to 126 days, the shortest cycle time recorded [3]. - The company repurchased 4.1 million shares for $507 million at an average price of $122.97 [12]. Segment Performance - Financial Services segment operating earnings increased to $178 million, up from $144 million in Q3 2024, driven by higher profit per locked loan [9]. - The Multifamily segment reported an operating loss of $16 million, compared to operating earnings of $79 million in the prior year, impacted by a one-time gain in 2024 [10]. - Lennar Other segment operating earnings were $62 million, up from $20 million in Q3 2024, primarily due to mark-to-market gains on technology investments [10][22]. Guidance - For Q4 2025, the company expects new orders between 20,000 and 21,000 homes, deliveries of 22,000 to 23,000 homes, and a gross margin of approximately 17.5% [5][13]. - The average sales price for Q4 is projected to be between $380,000 and $390,000, with SG&A as a percentage of home sales expected to be between 7.8% and 8.0% [13]. Market Conditions - The company noted that elevated interest rates persisted throughout Q3 but showed signs of decline towards the end of the quarter, providing optimism for future performance [3]. - The long-term need for housing remains, and the company is focused on meeting affordability and sustaining production through efficiency and scale [5].