06:23 AM EDT, 06/18/2024 (MT Newswires) -- Lennar ( LEN ) shares were down early Tuesday after the company's guidance for fiscal third-quarter home deliveries fell short of consensus at the midpoint, even though it recorded better-than-expected results in the preceding three-month period.

The homebuilder forecasts deliveries to be in between 20,500 and 21,000 homes for the ongoing quarter at a gross margin on home sales of about 23%, it said late Monday. For the quarter ended May 31, the company saw a 15% annual growth in deliveries to 19,690 homes.

The outlook's midpoint of 20,750 homes is "slightly below" the Thomson consensus estimate of 21,000 homes, representing a "small win for the bears," Wedbush Securities said in a client note. The brokerage has a underperform rating on Lennar's ( LEN ) stock and a 12-month price target of $144. Shares of the company decreased 3.4% in premarket activity.

New orders are seen at a range of 20,500 to 21,000 homes for the third quarter, while the company anticipates an average sales price of about $420,000 to $425,000. "We remain focused on delivering 80,000 homes for the full year, with a margin that remains consistent with last year's margin," co-Chief Executive Jon Jaffe said in a statement.

Lennar ( LEN ) reported second-quarter earnings of $3.45 per share, up from $3.01 the year before, surpassing the Capital IQ-polled consensus of $3.25. Revenue climbed to $8.77 billion from $8.05 billion, topping the Street's view for $8.55 billion.

"We are pleased to report another strong quarter against the backdrop of evolving market conditions as interest rates rose for most of the quarter and then subsided as the quarter closed," co-CEO Stuart Miller said. "Although affordability continued to be tested by interest rate movements and simultaneously challenged consumer sentiment, purchasers remained responsive to increased sales incentives."

Homebuilding revenue advanced 9% to $8.38 billion, mainly due to the increase in deliveries, partially offset by a 5% decline in average sales price to $426,000, the company said. New orders gained 19% to 21,293 homes.

Gross margin on home sales came in at 22.6%, compared with 22.5% in the 2023 quarter, "as a result of our careful management of incentives combined with our intense focus on reducing construction costs," Miller said. Total homebuilding costs and expenses widened to $7.11 billion from $6.44 billion year-on-year.

Price: 151.28, Change: -5.23, Percent Change: -3.34