Lennar profit up as CEO sees long-term demand

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Major home builder Lennar announced Tuesday that its third-quarter net profit rose 39% to $120.7 billion, or 54 cents a share, as construction completions and new orders continued to increase.

The announcement topped topped Wall Street's expectations, sending company stock up 6.2% in afternoon trading.

Headquartered in Miami, Lennar sells homes for entry level and move-up buyers, along with retirees. The U.S. homebuilding sector is considered a bellwether for the nation's housing market as the economy continues to grapple with the fallout of the national financial collapse five years ago.

"We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multi-family homes built over the last five years," Lennar CEO Stuart Miller said in a statement issued with the earnings report. "While there may be bumps along the road that may impact the short-term pace of the recovery, the long-term outlook for our business remains extremely bright."

Lennar's reported net income for the three months ended Aug. 31 topped the $87.1 million, or 40 cents per share for the same period last year. Analysts polled by FactSet had expected earnings of 45 cents per share.

Company revenue climbed 46% to $1.6 billion from $1.1 billion in the quarter. Wall Street had forecast $1.55 billion in revenue.

Home deliveries increased 37% to 4,990 homes. Despite a moderating sales pace, new orders rose 14% to 4,785 homes. The average sales price of those new homes rose 16%, the company reported.

Backlog, an indicator of potential future revenue, climbed 32% to 5,958 homes, with a 53% increase in backlog dollar value, Lennar said.

Contributing: Associated Press