Lennar Corporation LEN reported mixed second-quarter fiscal 2026 results, with adjusted earnings topping the Zacks Consensus Estimate while revenues missed the same. Year over year, both metrics declined, given ongoing softness in housing demand and a lower average sales price (ASP) for homes delivered.
LEN stock trickled down 2.5% during yesterday’s after-hours trading session, post the earnings announcement.
LEN’s Quarterly Numbers
Lennar’s adjusted earnings of $1.31 per share beat the Zacks Consensus Estimate of $1.23 by 6.5% but declined 31.1% from $1.90 in the year-ago quarter.
Total revenues of $7.94 billion missed the consensus estimate of $8.07 billion by 1.6% and fell 5.2% year over year. Results reflected pressure from lower home prices and affordability constraints.
Lennar Corporation Price, Consensus and EPS Surprise
Lennar Corporation price-consensus-eps-surprise-chart | Lennar Corporation Quote
Lennar’s Homebuilding Metrics
Homebuilding revenues declined 2% year over year to $7.62 billion from $7.84 billion. Revenues from home sales were $7.60 billion, down from $7.79 billion in the year-ago quarter, as lower pricing offset higher closings.
Home deliveries increased 2% to 20,519 homes from 20,131 homes a year ago and were within management’s guidance of 20,000-21,000 homes. The ASP of homes delivered fell 5% to $371,000 from $389,000, reflecting continued weakness in the housing market.
New orders decreased 4% year over year to 21,749 homes from 22,601 homes. The dollar value of new orders fell to $8.21 billion from $8.58 billion, while the ASP of new orders was $377,000 compared with $379,000 a year ago.
Backlog at quarter-end increased to 16,818 homes from 15,538 homes. The backlog dollar value rose to $6.61 billion from $6.48 billion, though the ASP in backlog declined to $393,000 from $417,000.
Gross margin on home sales was 15.6%, down from 17.8% in the year-ago quarter. The decline was due to lower revenue per square foot and higher land costs, partially offset by reduced construction costs as the company continued to pursue cost-saving initiatives. Meanwhile, as a percentage of home sales, SG&A expenses increased to 9.2% from 8.8%, mainly due to lower revenue leverage and higher marketing and selling expenses.
Other Segmental Highlights of LEN
Financial Services revenues declined to $236.9 million from $298.1 million a year ago. Operating earnings for the segment decreased to $101.1 million from $157.3 million, primarily due to lower profit per locked loan in the mortgage business.
Lennar Multifamily revenues were $63.6 million, significantly down from $230.3 million in the prior-year quarter. But the segment generated operating earnings of $18.3 million against an operating loss of $14.8 million a year ago.
Lennar Other revenues rose to $23.1 million from $5.2 million, while the operating loss narrowed to $38.9 million from $52.9 million.
Lennar’s Balance Sheet
Lennar ended the fiscal second quarter with homebuilding cash and cash equivalents of $1.82 billion. The company had no outstanding borrowings under its $3.1 billion revolving credit facility at quarter-end.
Homebuilding debt to total capital was 15.8% compared with 11% a year ago. During the fiscal second quarter, the homebuilder repurchased 5 million shares for $447 million at an average price of $89.35 and, after May 31, 2026, redeemed $400 million of 5.25% senior notes due in June 2026.
LEN’s Outlook for Fiscal Q3 2026
For the third quarter of fiscal 2026, Lennar expects home deliveries in the range of 20,500-21,500 homes and new orders between 21,000 and 22,000 homes. The company expects the ASP to be between $375,000 and $380,000. Gross margin on home sales is expected to be approximately 16%, while SG&A expenses are projected between 8.8% and 9% of home sales.
Financial Services operating earnings are expected in the range of $95-$100 million. Management also moderated its full-year fiscal 2026 delivery target to approximately 82,000-83,000 homes, citing pressure on interest rates and geopolitical uncertainty.
LEN’s Zacks Rank & Stocks to Consider
Lennar currently carries a Zacks Rank #4 (Sell).
Here are some better-ranked stocks from the Construction sector.
Comfort Systems USA, Inc. FIX currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comfort Systems delivered a trailing four-quarter earnings surprise of 39.3%, on average. The Zacks Consensus Estimate for Comfort Systems’ 2026 sales and EPS indicates improvements of 30.5% and 49.2%, respectively, from a year ago.
Quanta Services, Inc. PWR currently sports a Zacks Rank of 1. Quanta delivered a trailing four-quarter earnings surprise of 10.3%, on average.
The Zacks Consensus Estimate for Quanta’s 2026 sales and EPS implies an increase of 21.5% and 29.7%, respectively, from a year ago.
Dycom Industries, Inc. DY presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 25%, on average.
The Zacks Consensus Estimate for Dycom’s fiscal 2027 sales and EPS indicates growth of 34.8% and 30.3%, respectively, from the prior-year levels.
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