(Reuters) - Lennar Corp, the second-largest U.S. homebuilder, reported higher-than-expected quarterly profit and revenue on Wednesday, benefiting from a robust housing market.
The company's shares rose 4.2 percent to $48.75 in premarket trading.
Lennar's orders, a key indicator of future revenue for homebuilders, jumped 51.6 percent to 31,473 homes in the third quarter.
"The basic underlying fundamentals of the housing industry of low unemployment, higher wages and low inventory levels remain favorable and are likely to support longer-term strength in the housing market," Executive Chairman Stuart Miller said in a statement.
The Miami-based builder, which completed its acquisition of smaller rival CalAtlantic in February, sold 12,613 homes during the third quarter, compared with 7,598 homes last year. The average sales price increased 10.7 percent to $415,000.
While U.S. homebuilders have in recent years enjoyed strong housing demand, a short supply of homes and a spike in labor and raw material costs are forcing builders to hike home prices, in turn, dampening affordability.
More From This Section
Lennar is "keenly focused" on construction cost savings, the company said. Lennar's adjusted gross margins fell to 21.9 percent from 22.8 percent.
Net income attributable to the company rose about 82 percent to $453.2 million, or $1.37 per share, in the quarter ended Aug. 31.
According to Thomson Reuters I/B/E/S, the company's earnings excluding a tax benefit and an acquisition-related charge were $1.31, above the average analyst estimate of $1.19.
Revenue rose 73.9 percent to $5.67 billion, beating analysts' estimate of $5.64 billion.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Maju Samuel)