* Q4 profit, revenue top estimates
* Q4 orders rise 9 pct
* 2017 home sales to rise 7-9 pct
* Shares rise as much as 3.9 pct
(Adds details from conference call)
By Arunima Banerjee
Dec 19 Lennar Corp, the No. 2 U.S.
homebuilder, reported a higher-than-expected quarterly profit
and its CEO said he saw "potential upside" in Donald Trump's
The homebuilder, which mainly caters to buyers looking for a
second home, also said the housing market would continue to make
a "slow and steady recovery" next year.
An improving job market and attractive mortgage rates
continue to fuel demand for housing in the United States,
helping homebuilders such as Lennar and PulteGroup Inc.
U.S. home prices are set to rise almost 5 percent next year,
despite the prospect of several interest rate increases,
according to the latest Reuters poll.
The U.S. Federal Reserve raised interest rates last week and
signaled a faster pace of increases in 2017 as policy makers
adapt to the new administration.
President-elect Trump's promises of tax cuts, infrastructure
spending and deregulation have raised expectations that the
economy is set for stronger growth.
"As we look ahead to 2017, we expect to see a generally
similar economic environment define the homebuilding landscape
with some potential upside from the new administration in
Washington," Chief Executive Stuart Miller said on a call with
Miller, however, added that the improvement in the market
could be choppy and erratic as the new administration "goes
through the throes of enacting an agenda of change."
Lennar, whose shares rose as much as 3.9 percent on Monday,
is the first homebuilder to report since the Fed raised interest
rates by a quarter of a percentage point last week.
Data in the past few months has pointed to strength in the
housing industry. Permits for future construction of
single-family homes - the biggest segment of the market - rose
to a nine-year high in November, Commerce Department data showed
D.R. Horton Inc, the biggest U.S. homebuilder,
reported in November a 19.2 percent jump in fourth-quarter
revenue, helped by higher home sales and prices, and said it
expected its home sales for fiscal 2017 to rise 8-13 percent.
HIGHER HOME SALES
Lennar said orders - a key indicator of future revenue for
homebuilders - rose 9 percent in the fourth quarter ended Nov.
The company said in September it would buy fellow
Florida-based homebuilder WCI Communities Inc for about
$643 million, boosting its land bank in one of the fastest
improving housing markets in the United States.
Excluding benefits from the WCI deal, Lennar said it expects
to deliver between 28,500 and 29,000 homes for the year ending
Nov. 30, 2017, compared with 26,563 homes in 2016.
The company expects an average sales price of
$365,000-$370,000, up from $362,000.
Lennar sold 8,228 homes during the quarter, compared with
7,657 last year. The average sales price increased 2.6 percent
Lennar's net income attributable to shareholders rose to
$313.5 million, or $1.34 per share, in the quarter from $281.6
million, or $1.21 per share, a year earlier.
Revenue rose 14.6 percent to $3.38 billion.
Analysts on average had expected the company to earn $1.29
per share on revenue of $3.30 billion, according to Thomson
Up to Friday's close, shares of the company had fallen 11.2
percent this year.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Anil
D'Silva and Saumyadeb Chakrabarty)