Here's What Investors Must Expect Ahead of Lennar's Q4 Earnings

Core Viewpoint - Lennar Corporation is expected to report a significant decline in both earnings and revenues for the fourth quarter of fiscal 2025, with adjusted earnings per share (EPS) projected to drop by 44.7% year-over-year and total revenues expected to decrease by 8.3% compared to the previous year [1][3]. Revenue Performance - The company's revenue is anticipated to decline due to lower home sales, influenced by weak buyer confidence amid high mortgage rates and inflationary pressures [4]. - Lennar expects home deliveries to be between 22,000 and 23,000 units, with an average selling price (ASP) between $380,000 and $390,000, compared to 22,206 homes sold at an ASP of $430,000 in the same quarter last year [5]. - Homebuilding revenues are projected to decline by 9.5% year-over-year to $8.65 billion [6]. Earnings and Margins - The company's gross margin for home sales is expected to be around 17.5%, down from 22.1% a year ago, as it sacrifices margins to boost sales volume [9]. - EPS is projected to be in the range of $2.10 to $2.30 for the quarter [9]. - Increased selling, general, and administrative (SG&A) expenses are expected, with SG&A as a percentage of home sales rising to 8% from 7.1% year-over-year [10][11]. Orders and Backlog - New orders for the fourth quarter are expected to be between 20,000 and 21,000 units, reflecting a year-over-year growth of approximately 19.9% [12]. - Backlog units are projected to increase by 29.9% year-over-year to 15,114, with potential housing revenues up by 8.2% to $5.81 billion [12]. Technology and Operational Efforts - Lennar's technology-driven transformation efforts are expected to help ease some pressures, although they may also contribute to margin pressures in the near term [7][10]. - The company is focusing on incentivizing sales to enhance affordability and drive new home order volumes [7].