Lennar (LEN) Q4 2024 earnings summary

Executive summary

• Fourth quarter results missed expectations due to higher interest rates, leading to lower new orders (16,895 vs. 19,000 expected) and gross margin (22.1% vs. 22.5% expected); Q4 net earnings were $1.1 billion, or $4.06 per diluted share, with adjusted EPS at $4.03 reflecting mark-to-market gains on tech investments.

• Full-year net earnings reached $3.9 billion ($14.31 per diluted share); adjusted net earnings were $3.8 billion ($13.86 per share).

• New orders for the year rose 11% to 76,951 homes, while deliveries increased 10% to 80,210 homes; Q4 new orders fell 3% to 16,895 homes and deliveries decreased 7% to 22,206 homes.

• Increased incentives and price adjustments were necessary to stimulate sales and avoid inventory buildup.

• The company is accelerating its transition to an asset-light, land-light operating model, highlighted by the upcoming Millrose spin-off and Rausch Coleman acquisition.

Financial highlights

• Ended the quarter with $4.7 billion in cash and a 7.5% debt-to-total capital ratio, the lowest ever; total liquidity was approximately $7.6 billion.

• Q4 total revenues were $9.9 billion, down from $11.0 billion in the prior year quarter; homebuilding operating earnings for Q4 were $1.5 billion.

• Repurchased 3 million shares for $521 million in Q4, totaling 13.6 million shares and $2.1 billion for the year.

• Returned $3.3 billion to equity and debt holders in fiscal 2024.

• Book value per share increased to $104.

Outlook and guidance

• Q1 2025 guidance: 17,000–17,500 closings, gross margin of 19%–19.25%, average sales price $410,000–$415,000, EPS $1.60–$1.80.

• Full-year 2025 delivery target: 86,000–88,000 homes, including Rausch Coleman acquisition.

• SG&A expected at 8.7%–8.8% of revenues in Q1; tax rate at 24.5%.

• Q1 2025 Financial Services operating earnings expected at $100–$110 million.