Lennar’s Profit Soars but Its Forecast Is Cut

Lennar Corp., one of the nation’s largest home builders, said Monday that its second-quarter profit surged 33% on sharply higher sales, but the company lowered its full-year earnings outlook because of an expected slowdown in orders.

Second-quarter earnings rose to $324.7 million, or $2 a share, from $243.5 million, or $1.48 a share, during the same period last year. Analysts polled by Thomson Financial were looking for earnings of $1.85 a share on sales of $3.87 billion, on average.

Quarterly revenue soared 56% to $4.58 billion from $2.93 billion a year earlier as home sales climbed 53% to $4 billion from $2.6 billion. Sales were higher primarily because of a 40% increase in home deliveries and a 10% increase in the average sale prices of homes delivered in 2006.

The Miami-based company’s average sales price of homes delivered increased to $322,000 from $293,000.

The positive results correspond with national statistics that showed that new home sales rose 4.6% in May, which surprised economists who had forecast that rising mortgage rates would slow down the market.

In a conference call, Chief Executive Stuart Miller attributed the strong showing to the company’s ability to manage inventory and deliver on its backlogs -- despite higher cancellation rates and a greater use of incentives and discounting.

Despite the solid results, Lennar warned the second half of this year would be hurt by slower new orders and by cancellations. Lennar lowered its full-year earnings guidance to a range of $8 to $8.25 a share from $9.25 a share.

Analysts are expecting full-year earnings of $8.15 a share, according to Thomson Financial.

Shares of Lennar rose $1.14, or 2.6%, to $45.65.