06:29 AM EDT, 09/19/2025 (MT Newswires) -- Lennar ( LEN ) shares declined early Friday as the homebuilder issued a fiscal fourth-quarter delivery outlook below market estimates, while it recorded weaker-than-expected results in the prior three-month period amid persistent housing market challenges.

The company anticipates delivering between 22,000 and 23,000 homes in the ongoing quarter, it said late Thursday. The current consensus on FactSet is for 25,587 home deliveries. The group delivered 21,584 units in the third quarter, up from 21,516 a year ago, but below the Street's view for 22,414 homes.

New orders are pegged to be in a range of 20,000 to 21,000 homes for the fourth quarter, while the market is looking for 20,557 units. The group also expects gross margin on home sales to be at roughly 17.5% and forecasts an average sales price of $380,000 to $390,000 for the current quarter.

The stock decreased 2.9% in the most recent premarket activity.

"Interest rates remained elevated throughout the third quarter, but then declined towards the quarter's end," Co-Chief Executive Stuart Miller said in a statement. "This downward trend, paired with the Federal Reserve's recent rate cut, gives us optimism as we head into the fourth quarter."

The Federal Reserve reduced its benchmark lending rate by 25 basis points on Wednesday, noting increased downside risks to employment and signaling further policy easing later in 2025. The move is expected to help reduce interest rates for builder and developer loans, National Association of Home Builders Chief Economist Robert Dietz said in a separate report earlier in the week.

"We believe that now is a good time to moderate our volume and allow the market to catch up," according to Miller. "Looking ahead, the long-term need for housing remains."

Adjusted per-share earnings came in at $2 for the three months through August, down from $3.90 a year earlier, declining more than the average analyst estimate on FactSet for $2.11 Revenue fell to $8.81 billion from $9.42 billion last year, trailing the Street's expectation for $8.97 billion.

Homebuilding revenue dropped to $8.25 billion from $9.05 billion in the 2024 quarter. The average sales price moved down to $383,000 from $422,000 last year, due to persistent market weakness. New orders advanced 12% to 23,004 homes.

"While our current results reflect incentives and price adjustments to match market conditions, our scale and technology investments are building the foundation for structural cost efficiencies," Miller said.

Gross margin on home sales was 17.5%, down from 22.5% a year ago, missing analysts' estimate for 17.8%, amid lower revenue per square foot and higher land costs, according to the company.