Lennar Corp Class A (NYSE:LEN) stock fell 2.05% (As on September 19, 11:26:03 AM UTC-4, Source: Google Finance) after the company posted third-quarter earnings that fell short of analyst expectations as the homebuilder navigated continued pressures in the housing market. The company delivered 21,584 homes during the quarter, essentially flat compared to 21,516 homes in the same period last year. However, revenue from home sales decreased 9% YoY to $8.2 billion, primarily due to a 9% decline in the average sales price of homes delivered, which fell to $383,000 from $422,000 a year earlier. Gross margin on home sales declined to 17.5% from 22.5% in the prior-year quarter, while SG&A expenses as a percentage of home sales increased to 8.2% from 6.7% a year ago. Despite the challenges, new orders increased 12% to 23,004 homes, indicating some underlying demand strength. The company ended the quarter with a backlog of 16,953 homes valued at $6.6 billion. Operating earnings for the Financial Services segment were $177 million in the third quarter of 2025, compared to $144 million in the third quarter of 2024. Third quarter net earnings attributable to Lennar in 2025 were $591 million, or $2.29 per diluted share, compared to third quarter net earnings attributable to Lennar in 2024 of $1.2 billion, or $4.26 per diluted share.

Moreover, during the quarter, the company achieved a starts pace and sales pace of 4.4 homes and 4.7 homes per community per month, respectively, as we used targeted incentives, including mortgage rate buydowns, to sustain momentum. Additionally, the company carefully managed the inventory levels, ending the quarter with fewer than two completed, unsold homes per active community, which is within the historical range. Inventory turns improved to 1.9 times, and cycle time improved to 126 days. Interest rates remained elevated throughout the third quarter, but then declined towards the quarter’s end.

LEN in the third quarter of FY 25 has reported the adjusted earnings per share of $2, missing the analysts’ estimates for the adjusted earnings per share of $2.10. The company had reported the adjusted revenue of $8.8 billion in the third quarter of FY 25, missing the analysts’ estimates for revenue of $8.97 billion.

For the fourth quarter, Lennar expects new orders of 20,000 – 21,000 homes, to deliver between 22,000 and 23,000 homes with an average sales price of $380,000 to $390,000. The company anticipates gross margins to remain at approximately 17.5%, consistent with the third quarter.