Miami, FL, Mar. 16--Lennar Corporation, one of the nation's largest homebuilders, today reported earnings for its first quarter ended February 29. First quarter net earnings in 2004 were $139.3 million, or $0.84 per share diluted, compared to net earnings of $106.3 million, or $0.68 per share diluted, in 2003.
Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "We are pleased to report another record quarter of revenues and earnings. We are even more pleased with our record new orders and record backlog, both growing 30% over last year, closing the acquisition of The Newhall Land and Farming Company and improving prospects for our financial services operations--all combining to set us up for another record year in 2004 and positioning us well for 2005 and beyond.
"Three basic concepts will help support and possibly expand future earnings: First, Homebuilding Industry Fundamentals--Positive demographic trends, favorable interest rates and supply constraints continue to drive the underpinnings of a strong housing market. Second, Strong Gross Margins--Gross margins remain strong for the industry in general and for Lennar in particular. As demand exceeds supply in strategic markets, pricing power continues to enhance margins. While price increases may be somewhat offset by increases in lumber and other materials costs, in the long-term, we, as well as others in the industry, continue to use our size to reduce costs overall while also improving quality. Third, Industry Consolidation--We continue to target unique opportunities within the industry by increasing market share organically and by the consolidation of small and large homebuilders. Consolidation results in greater cost savings, increased access to the capital markets and growth of ancillary services.
"Additionally, we remain a growth-focused company and, therefore, we employ a diversified growth strategy to enhance future opportunities for our company. Our diversified growth strategy focuses on organic growth augmented by strategic acquisitions to capitalize on market inefficiencies. One exciting example of this strategy is our previously announced and now closed acquisition, through a joint venture, of The Newhall Land and Farming Company, located in Los Angeles County, California. This unique transaction gives us access to well-positioned, owned or controlled homesites in one of the most supply-constrained markets in the country. This strategic opportunity will not only allow us to enhance our existing homebuilding operations in Los Angeles County, but will also give us the opportunity to establish a dual marketing division in this land-constrained market which should further enhance our return on capital.
"The combination of our excellent land position and record-level $4.5 billion backlog gives us confidence to meet our goal of 37,000 deliveries in 2004. This position also allows us to maximize our pricing power by slowing our sales pace to match our construction pace. Given the continued strength in our program and assuming overall housing and general economic conditions remain consistent with current trends, we are comfortable increasing our 2004 earnings per share goal to $5.30 from $5.25 per share."
Revenues from sales of homes increased 15% in the first quarter of 2004 to $1.7 billion from $1.4 billion in 2003. Revenues were higher due primarily to a 15% increase in the number of home deliveries. New home deliveries increased to 6,495 homes in the first quarter of 2004 from 5,642 homes last year. In the first quarter of 2004, new home deliveries were higher in each of the Company's regions, compared to 2003. The average sales price on homes delivered increased to $256,000 in the first quarter of 2004 from $255,000 in 2003.
