Investing.com - Homebuilding giant Lennar (NYSE:LEN) climbed on Wednesday, briefly hitting a new 52-week high and sidestepping the plunge in markets after the company delivered better-than-expected fiscal third-quarter earnings as home sales surged.
The second-largest U.S. homebuilder (by 2018 sales volume), Lennar (NYSE:LEN) reported earnings of $1.59 a share on revenue of $5.86 billion, ahead of the consensus estimates from Investing.com for earnings of $1.32 per share on revenue of $5.48 billion. Earnings were up 20% from a year ago while revenue grew 3.4%.
Lennar rose 2.6%, shrugging off a 2.1% decline in the S&P 500. It hit a 52-week high of $57.74 in the early afternoon.
The earnings beat was driven by a surge in homesales as lower mortgage rates boosted demand. The 30-year fixed-rate mortgage dropped below 4% in the past week, according to the Mortgage Bankers Association's Weekly Mortgage Application Survey.
In its homebuilding segment, sales rose to $5.44 billion from $5.29 billion a year earlier, as the company sold 13,522 homes, an increase of 7%, while orders for new homes gained 7% to 14,469 in the quarter from a year earlier. Lennar (NYSE:LEN) has operations in 15 states.
The company also said it was making progress in becoming a land-lighter company - decreasing captial tied up in land to boost cash flow -- with its controlled homesite percentage rising to 30%.
"We've clearly focused our attention on becoming a land lighter company. Regarding our forward-looking 40% goal of controlled homesites versus owned, during the quarter, we made great progress by increasing our controlled homesites from 25% to 30%," CEO Rick Beckwitt said. "We expect to continue making significant progress on this goal by entering into deals with regional and national land platforms."
Lennar is up about 46% for the year so far and has an average price target of $60, according to consensus estimates from Investing.com.