Lennar Corp LEN shares are facing selling pressure Wednesday morning despite moving higher after the homebuilder reported better-than-expected financial results late Tuesday.
- Q1 Revenue: $6.49 billion beat estimates of $5.93 billion
- Q1 EPS: $2.12 beat estimates of $1.55 per share
Deliveries jumped 9% year-over-year to 13,659 homes, while new orders decreased by 10%. Backlog also fell 29% to 19,403 homes.
"During the quarter, we saw a generally strong economy at the intersection of high inflation and strong employment numbers, while the housing market continued down a winding road of trying to find its footing. In December, interest rates and sticker shock continued to constrain sales activity, while in January and early February, lower interest rates energized sales," said Stuart Miller, executive chairman of Lennar.
"In late February, a spike in interest rates impacted website and community traffic and had a slight impact on sales ... the housing market continues shifting as growing household and family formation continued to drive demand against a chronic supply shortage."
Lennar sees fiscal second-quarter new orders between 16,000 and 17,000 at an average sales price between $435,000 and $445,000. The company expects to deliver 15,000 to 16,000 homes next quarter.
What's Pushing Shares Lower: The broader market appears to be selling off after new developments related to Credit Suisse Group CS sparked fears of wider contagion in the financial sector in the wake of a series of bank runs last week that led to the biggest banking collapse since the 2008 financial crisis.
Credit Suisse tanked in early trading Wednesday after the firm's largest shareholder, Saudi National Bank, said it could not buy additional shares of the Swiss bank.
"We cannot because we would go above 10%. It’s a regulatory issue," SNB chairman Ammar Al Khudairy told Reuters.
The news comes after Credit Suisse announced earlier this week that it found "material weakness" in its process for reporting financials. The news appears to be spreading nervousness that weakness persists in the banking sector.
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LEN Price Action: Lennar shares were down 0.37% at $100.40 at time of publication, according to Benzinga Pro.
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