Lennar Beats on EPS but GAAP Results Lag

Lennar (NYSE: LEN  ) reported earnings March 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q1), Lennar met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share shrank significantly.

Gross margins increased, operating margins increased, net margins contracted.

Revenue details
Lennar booked revenue of $724.9 million. The 10 analysts polled by S&P Capital IQ hoped for a top line of $720.9 million on the same basis. GAAP reported sales were 30% higher than the prior-year quarter's $558.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.08. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.06 per share. GAAP EPS of $0.08 for Q1 were 43% lower than the prior-year quarter's $0.14 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 4.6%, 150 basis points better than the prior-year quarter. Operating margin was 0.9%, 200 basis points better than the prior-year quarter. Net margin was 2.1%, 280 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $869.4 million. On the bottom line, the average EPS estimate is $0.15.

Next year's average estimate for revenue is $3.55 billion. The average EPS estimate is $0.76.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 492 members out of 1,196 rating the stock outperform, and 704 members rating it underperform. Among 371 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 141 give Lennar a green thumbs-up, and 230 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lennar is outperform, with an average price target of $24.50.

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