Lennar Corp (NYSE:LEN) stock fell 0.18% (As on December 15, 11:23:10 AM UTC-4, Source: Google Finance) after the company offered a forecast for the first quarter that exceeded expectations, with new orders projected to be between 17,500 and 18,000, surpassing the consensus estimate of 16,493. Lennar’s net new orders increased by 32% year-over-year to 17,366, outperforming the estimated 16,840. Despite this positive outlook, Lennar’s stock declined due to a slightly weaker gross margin on home sales, standing at 24.2% compared to the estimated 24.4%. The company still expects to deliver ~10% more homes in FY24. The company’s backlog consisted of 14,892 homes valued at $6.6 billion. Deliveries also saw a significant uptick, with a 19% increase to 23,795 homes.

Further, the homebuilding operating earnings stood at $1.9 billion, with a gross margin on home sales of 24.2%. Selling, general, and administrative expenses were 6.6% of revenues from home sales, leading to a net margin on home sales of 17.6%. The Financial Services segment contributed operating earnings of $168 million, despite a multifamily operating loss of $12 million and a Lennar Other operating loss of $125 million. The company’s balance sheet remains robust, with homebuilding cash and cash equivalents totaling $6.3 billion. Lennar Corp has no outstanding borrowings under its $2.6 billion revolving credit facility, and the homebuilding debt to total capital ratio improved to 9.6%. During the quarter, the company redeemed $378 million of senior notes and repurchased $110 million aggregate principal amount of senior notes. Additionally, 3 million shares of common stock were repurchased for $337 million. Throughout the fiscal year, Lennar Corp repurchased 10 million shares of common stock for $1.1 billion and redeemed/repurchased $1.1 billion of senior notes. The homebuilding return on inventory was reported at 29.4%.

LEN in the fourth quarter of FY 23 has reported the adjusted earnings per share of $5.17, beating the analysts’ estimates for the adjusted earnings per share of $4.60. The company had reported the adjusted revenue of $11 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $10.22 billion.

Looking ahead, Lennar Corp expects to deliver approximately 80,000 homes in fiscal year 2024, with a gross margin of between 21.0% to 21.25% in the first quarter. The company plans to continue its strong cash flow generation and capital allocation strategy, targeting $2 billion in share repurchases for 2024.